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Image Resources' infill drilling provides support for North Perth Basin project Feasibility Study

Image Resources (ASX: IMA) continues to deliver a positive news flow from the North Perth Basin project in Western Australia, with the latest highlights from the Gingin South deposit.

Infill drilling been confirmed the deposit as high grade, with consistently high grade intersections identified from 100 metre spaced infill drilling.

The highlight is 10 metres at 18.0% heavy minerals (HM) from 18 metres at a 2.5% HM cut-off, which includes the very high grade 6 metres at 25.4%HM.

Image said that most of the 5.5 kilometre long deposit has now been drilled at 20 metre by 100 metre line spacing, which allows for a Measured Resource estimation once mineralogy determinations are complete.

Highlighting the potential of the Gingin South deposit, earlier in the year the company announced a whopping 240% increase in the resource to 8.1 million tonnes at 6.1%HM, containing 492,000 tonnes of HM.

The upgrade was due to the discovery of a major extension to the deposit.

Moving the Gingin South deposit forward

The next step for Image in the assessment of the Gingin South deposit is to composite the mineral intersections for mineralogical analysis, followed by the refining of the geological model in preparation for a new resource estimate.

The target is that most of the resource will be upgraded to the higher confidence category of Measured.

Additional drilling will kick off in October to infill the Inferred section of the resource to at least 20 metre by 200 metre hole spacing to upgrade this section to Indicated status.

Feasibility Study

The Gingin South deposit was one of the six resources included in the Scoping Study delivered by Image last month which included an IRR of 32.1% to 42.9%, a capital payback within first 18 to 22 months of operation, with a NPV of $59 million to $98 million for the first six resources.

The study also outlined a net life of mine cash flow after capital of $170 million to $259 million, capital costs of $84 million, and a 3.6Mtpa multi-pit operation over initial 12 year mine life.

These details will now be included in a Feasibility Study, which the company said was scheduled towards the end of the mine sequence for the Scoping Study, but in light of the high grade nature of the deposit its sequencing will be re-examined in the Feasibility Study.

This will determine if earlier exploitation will improve project economics.