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Dragon Energy Increases Resource At Rocklea Iron Ore Project

Dragon Energy's (ASX: DLE) Rocklea project in the Pilbara region of Western Australia now offers potentially better cost efficiencies and has a straight road towards advanced mine planning and project development.

There is also a maiden Resource in the offing for the Nameless Project which is close to completion.

Over 84% of the Channel Iron Mineralisation JORC Resources at Rocklea, or 78.94 million tonnes at 52.37% iron (59.31% caFe), has been moved into the Indicated category following the development of a new resource model based on data from reverse circulation drilling carried out from 2005 to 2009 and infill drilling from 2011 to this year.

"We are very pleased with the results of this new Resource model. Not only have we achieved our main objective by bringing the majority of the Resource to an Indicated level but we have also added over 30 million tonnes to our total iron ore Resources at a 50% iron cut-off grade," managing director Gang Xu said.

"The results at the 45% cut-off grade are also extremely encouraging with only a slightly lower average iron grade, compared to the 50% cut-off. It is likely that the project is viable at a 45% cut-off and this gives us 117.06 million tonnes grading 51.65% iron, or a calcined iron content of 58.60%.

"Our maiden Resource for the Nameless Project is close to completion and when we combine that with our consolidated Rocklea project, we will have a large scale Resource to pursue our company objectives."

Further adding to the project's value is the addition of Rocklea iron ore project that Dragon had purchased from Murchison Metals' (ASX: MMX) for A$3.2 million.

This has served to increase the overall resource at the consolidated Rocklea project to 182.6 million tonnes at 52.7% Fe (59.5% caFe).

Future plans

Looking ahead, Dragon Energy now plans to:

- complete the maiden Resource model for the Nameless Project;
- identify and secure approvals for an export port suited to road transportation;
- undertake a formal pre-feasibility study for the consolidated project;
- launch and complete long lead time approval items such as environmental studies, heritage agreements and mining lease approvals;
- identify new targets within the licences acquired from Murchison to further grow its resource; and
- identify and secure financing for project development.

Approach to production

Dragon could be in production as early as 2013 at the Pilbara Project, where the company is pursuing rapid development of a direct shipping ore operation.

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

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.

Dragon has defined an exploration target of 140 to 190 million tonnes of 48 to 52% iron (54-56% caFe) for the Nameless Project.

Mapping by AusQuest delineated 15 kilometres strike of a prospective 200 to 600 metre wide palaeochannel, of which 12.5 kilometres was drill tested.

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