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Dragon Energy Under The Radar Developing DSO Pilbara Iron Ore Project

Dragon Energy (ASX: DLE) is making significant progress at the Pilbara Iron Project in Western Australia, where the company is pursuing rapid development of a Direct Shipping Ore operation.

The Company could be in production as early as 2013.

The Pilbara project comprises the Nameless and Rocklea projects, where JORC Resource calculations are underway.

At Rocklea, Golder Associates is nearing completion of a Resource definition, while CSA Global recently commenced the Resource calculation for Nameless following a 127 hole reverse circulation drilling program.

A Scoping Study at Rocklea and Nameless showed that production through road transportation could begin as early as the end of 2013. Subject to defining adequate JORC Reserves and securing adequate port facility, Nameless and Rocklea could represent a medium term development scenario.

Studies and commercial negotiations for short term infrastructure transport options and port access are continuing. Dragon is aiming to secure approvals for an export port suited to road transportation, while awaiting access to Anketell Port.

Approvals and environmental studies are underway, with Flora and SRE environmental surveys completed at the Rocklea project. Further environmental surveys are planned for the September quarter.

Negotiations are underway with native claimants in relation to the mining lease application at Rocklea.

Infrastructure

One of the keys to iron ore development is access to adequate infrastructure to enable delivery of product to market. There are potential sites on the West Pilbara coastal region that could represent a temporary solution while options for rail access (e.g. Solomon hub) are investigated.

Finance

Dragon is in the process of identifying and securing the financial resources for the development of the Pilbara Iron Project.

The company is well funded, ending the March quarter with cash reserves of $10.6 million.

West Australian exploration

Dragon holds nine projects, including Rocklea and Nameless, in Western Australia, comprising 31 tenements for a total of 1,505 square kilometres.

These include five projects in the Midwest region, one in the Goldfields-Esperance region and three in the Pilbara region.

The tenements are primarily prospective for hematite and magnetite iron ore and manganese mineralisation. Other potential commodity targets include gold, base metals and uranium.

Assays from surface geochemistry sampling of soil and stream sediment from Dragon's Mt Gibson Project in the Midwest region are pending.

Dragon has also been granted two tenements at the Ashburton Project, which is located within the Ashburton Basin in the Pilbara.

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