Nevada Iron (ASX: NVI) has banked A$1.96 million from a private placement to sophisticated Canadian, Swiss, Australian and United Kingdom investors, which will go towards advancing the Buena Vista Iron Project in Nevada.
Demonstrating the progress being made at Buena Vista, Nevada Iron has again released further thick, high grade magnetite intersections from the Section 5 magnetic anomaly of 175.3 metres at 25.1% iron from 27.4 metres, including 35.1 metres at 38.1% iron; and 175.3 metres at 24.4% iron from 30.5 metres, including 26 metres at 31.8% iron.
An extensive 16,655 metre drilling program to test the Section 5 and West Extension magnetic anomalies has recently been completed, with Section 5 showing the most potential to delineate additional shallow higher grade resources.
Near surface grades of plus 50% iron from one reverse circulation hole are considered to be very encouraging, and illustrate the potential to define higher grade near surface mineralisation at Section 5 that can be mined early in the project life.
Very thick magnetite mineralisation was discovered in an oval shaped area of some 600 metres east to west by 50 to 400 metres north to south and to depths of 200 metres, where several holes terminated in strong mineralisation.
Section 5 is shaping up to be a major deposit, with initial indications from recent drilling suggesting the mineralisation is much larger than the defined exploration target of 12 to 18 million tonnes at 18 to 26% total iron.
The delineation of higher grade exploration targets and prospects is expected to lead to a revision of the existing mine plan and definition of a larger project.
Highlighting the size potential of the Buena Vista Project, currently identified exploration targets provide for an additional 195 to 268 million tonnes of exploration potential.
A large number of assays are still pending for Section 5 and further results from the drill program are expected in the near term.
The recent drill program was designed to facilitate the project's optimisation plan of:
- Increasing Phase 1 plant throughput from 4.8 million tonnes per annum to a minimum of 6 million tonnes per annum, with the potential to be higher;
- Scheduling the mining of other deposits, in addition to the West Deposit, in the initial years to increase concentrate production to levels of up to 2.4 million tonnes per annum; and
- Investigating the potential to develop a Phase 2 project after a few years of operation, to produce around 4 to 5 million tonnes per annum of concentrate.
Buena Vista has demonstrated its economic advantages with the iron able to be readily upgraded without the need for expensive fine grinding.
Metallurgical test work is proving that the Buena Vista mineralisation upgrades, at a significantly coarser grind than typical banded iron formation (taconite) magnetite ore, to produce high quality clean concentrate at 67.5-69% iron.
The Buena Vista Project is strategically located close to established infrastructure which reduces the development costs and shortens the time taken to get the project into production.
Inclusive to the many advantages inherent in Buena Vista are the low capital cost, the low risk political environment, the cash costs which are equivalent to or better than the majority of emerging magnetite producers and the relatively short time to production.
The project also represents a much lower operational risk than most emerging producers because of the proposed scale of production.
Nevada Iron completed a private placement of 11.5 million shares at $0.17 per share.
As part of the placement, the company has agreed to place 736,558 options exercisable at $0.17 and expiring 2 years from their date of grant, to the parties that assisted with the placement.
Funds from the placement will also go towards Nevada Iron's proposed TSX listing.
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