African Aura Mining (LON:AAAM, TSX-V:AUR) has started a first phase 4,200 metre initial resource definition drilling programme at its wholly owned Nkout iron ore project in southern Cameroon after an airborne geophysical survey returned “encouraging results”, defining a major iron ore target.
Previous grab sampling at Knout has returned grades of up to 68% Fe (iron) and 55% Fe. The company added that Nkout was “strategically well located” in an emerging iron ore province, in proximity of the 2.5 Bt (billion tonne) Mbalam iron ore deposit and close to the proposed rail route to a port, which will service Mbalam.
The data produced by the airborne survey over Nkout suggested the presence of an east-west striking antiform with two limbs approximately 100m thick and magnetic susceptibilities of around 2.0, which the company highlighted as being consistent for a prospective banded iron formation.
The company said that the current 10 hole programme was designed to refine the geological model and to establish a maiden iron ore resource this year. The phase 2 programme will include drilling of a further 8,000 metres within the current approved budget.
Broker Evo Securities said that it anticipated results from the drilling programme in Q4 2010 and expected a newsflow from the company over the next six months that could heavily impact its share price. Evo also noted the convenient location of the project.
African Aura has three principal iron ore projects in Cameroon, namely the Nkout, Ngoa and Akom Hills and considers that their combined dimensions represent a potentially significant iron ore asset.
Nkout is defined by a major geophysical anomaly co-incident with a significant range of hills with at least 8 km (kilometres) of strike length with a further 12 km of targets existing around the deposit.
African Aura Mining was formed late last year through a merger between Mano River Resources and African Aura Resources. The merger was completed in October 2009, and the enlarged company has a considerable portfolio of projects focused on iron ore and gold deposits in highly prospective, underexplored countries of sub-Saharan Africa.
In April 2010, African Aura conducted a private placing with certain institutional and other investors to raise approximately £11.3 million, issuing 17.39 million new shares at 65 pence each. The proceeds are intended to fund work across its project portfolio over the next 14 months, including the New Liberty gold deposit and the Weaju deposit in Liberia, and the Nkout iron ore project.