London Mining (AIM, OSX: LOND) has expanded its JORC-compliant resource at the Isua project in Greenland to an Indicated Resource of 114Mt (million tonnes) and Inferred Resource of 837Mt respectively, grading 37% and 36% Fe respectively.
In December 2009, London Mining confirmed a JORC resource of 574Mt grading 37%. The company said this latest estimate considers parts of the Isua ore body that could potentially be mined within an expanded pit shell.
Both JORC statements were carried out on London Mining’s behalf by Snowden Mining Industry Consultants. The latest resource is based on a cut-off of 20% Fe.
The expanded pit shell has been generated by SNC Lavalin, using appropriate cost and processing parameters reflecting the proposed scale of the Isua project. London Mining said it plans additional infill and extensional drilling at Isua in 2010, and it subsequently expects a revised prefeasibility study to be completed in Q2 2010.
"The delineation of additional resources at Isua for a total of 951Mt is a further step towards defining the technical parameters and potential of the project”, London Mining chief executive Graeme Hossie said. “Isua is ideally equipped to take advantage of the growing seaborne iron ore market by virtue of its substantial size, premium grade product and close proximity to a section of the Greenland coast that permits year round shipping. We look forward to reporting on the results of the 10Mtpa pre-feasibility study for Isua in Q2 2010".
The company completed a programme of ‘Davis Tube’ testwork on one hundred drill core samples from Isua with the bulk of the samples, ninety-one, sourced from within a pit shell approximating the first 5 years of production. The testwork confirms that the Isua BIF resource can produce a high grade Fe concentrate using magnetic separation, London Mining said. Additionally, the company stated that a further flotation stage may be used to obtain the final product specification with reduced impurities and increased Fe content.
In last month’s operational update, London Mining noted that a recently completed scoping study showed that the economics of the Isua project are greatly improved if a 10Mtpa operation is considered producing a high grade, low impurity, blast furnace pellet feed concentrate. On this basis the operating cost could be reduced to US$27/t, with estimated capex of US$2.4 billion.
The existing PFS (Pre-Feasibility Study) determined that the project could be built for an estimated capex US$1.74 million, with the project including all the supporting facilities necessary to produce 5Mtpa of 70.8% DR pellet feed. Additionally the PFS showed that a 23 year life-of-mine project could be operated, at an average annual cost of US$37/tonne.
The wholly-owned Isua project, located 150km Northeast of Nuuk, is one of London Mining's four principal iron ore projects. The other three programs are the Marampa project in Sierra Leone, the Wadi Sawawin project in Saudi Arabia and the CGMR joint venture in China.
Marampa in Sierra Leone is the company’s main project where the construction phase of the 1.5Mt per annum (Mtpa) is now underway. London Mining expects Marampa’s start-up in Q1 2011, with the first shipment expected in Q2 2011.
Elsewhere the bankable feasibility study optimisation and JORC upgrade is on schedule at the 50%-owned Wadi Sawawin project in Saudi Arabia, and financing discussions are underway. And the 50%-owned Chinese venture, China Global Mining Resources JV (CGMR), reached 1 million tonnes of mined ore in 2009.
Disclosure: The author holds no positions in the company