Pilbara iron ore developer United Minerals Corporation's (ASX: UMC) shares received a shot in the arm from a boost in iron ore resources at its Pilbara deposit in Western Australia.
Located in proximity to BHP Billiton, Rio Tinto and Fortescue's existing railway infrastructure in the Pilbara, total resource at United's Railway prospect has increased by 29% to 158Mt at 58.03% Fe. While Direct Shipping Ore (DSO) Bedded Marra Mamba ore has increased to 100.7Mt at 60.3% Fe, a 32% increase.
The increases were as a result of 157 additional drill holes being sunk at Railway prospect. Independent expert Lynn Widenbar of Widenbar & Associates Pty updated the resource.
The drilling also outlined significant extensions to the Railway deposit mineralisation, in the Boundary Zone where thick high grade bedded Fe mineralisation has been recently reported.
“The 100.7Mt of Indicated DSO bedded ore forms the basis for planning a mining operation at the Railway Deposit for the next 10 to 20 years,"said United Minerals Matt Hogan CEO of United Minerals.
Hogan said the company is initially looking at a 3Mtpa mining operation with ore to be trucked to Port Headland.
Technical Director Barry Fehlberg was optimistic the strong increase in high grade Bedded DSO Marra Mamba ore augered well for a high conversion rate of indicated resource to measured resource as drilling continues.
The recent placement of shares to one of China’s top steel buyers China Railway Materials Commercial Corp. Group, worth $27.2 million to United, related offtake agreement and resource upgrade meant the company was confident about becoming a producer of iron ore by 2011.
Strangely, given the spate of positive news, the market appears not to have appreciated the significance of the announcements and transport options, as the company's valuation has not increased in recent months.