Mineral Resource Statement

Golder Associates have completed a resource model using all geological and assay data available as at 4 September 2006 and prepared a mineral resource estimate. The resource estimate was classified in accordance with the Australasian Code for the Reporting of Identified Mineral Resources and Ore Reserves (JORC Code, 2004). The magnetite deposit within the Company’s mining leases has a strike length of approximately 6,000 metres and a vertical depth ranging from 50 to 500 metres. The available data has allowed Golder Associates to estimate the resource contained within 5,950 metres of strike with variable depths ranging from 50 to 480 metres below surface. Based on the above criteria Golder Associates estimated the Southdown deposit contains 479.1 million tonnes grading 37.3% magnetite of which 427.3 million tonnes grading 38.2% magnetite are classified as Indicated Resources and 51.8 million tonnes grading 30.1% magnetite are classified as Inferred Resources.

The resource estimate was classified in accordance with the Australasian Code for the Reporting of Identified Mineral Resources and Ore Reserves (JORC Code, 2004).

 

 

 

 

 

 

 

 

 

 



Notes:

  • Estimation method: Block model, Ordinary Kriging using 3m composite data.
  • Resources reported below the depth of oxidation (approx 25m) with depths ranging from 50 to 480m below surface.
  • Resources reported for 5,950m of strike.
  • The resource was defined using geological boundaries and a nominal cut-off grade of 10 wt% Davis Tube Concentrate (DTC).
  • Extrapolation along strike was limited to within 100m of drill holes.
  • Extrapolation down and up dip was limited to 25m for Indicated and 50m for Inferred resources.
  • In-situ density for the main mineralised unit was assigned to the mineralised domains using a regression of 0.0091 x DTC wt% + 3.172. This regression was derived from 3097 paired density and DTC wt% values.
  • In-situ density for the other mineralised unit was assigned to the mineralised domains using a regression of 0.0081 x DTC wt% + 3.25. This regression was derived from 614 paired density and DTC wt% values.
  • The Ordinary Kriging interpolation method was used for resource estimation of DTC, DTC Fe, DTC SiO2, DTC Al2O3, DTC TiO2, DTC S, DTC Na2O and DTC K2O using variogram parameters defined from geostatistical analysis.
  • The Inverse Distance Squared interpolation method was used for resource estimation of DTC P, DTC MgO, DTC CaO, DTC Mn, DTC V and DTC LOI, to allow reporting of these additional variables not required to be of the same level of estimation rigour as the other variables.
  • Estimations for concentrate grades were weighted by Davis Tube concentrate (DTC) in order to appropriately reflect the relationship between DTC and the DTC assays. Weighting was completed by calculating the accumulation (DTC x DTC assay) and subsequently back calculating the DTC assay estimates by dividing by relevant estimated DTC values.
  • Recovery and grade rounded to 1 decimal place (except TiO2, S, Na2O, MgO & CaO - 2 decimal places and K2O, P, Mn & V - 3 decimal places).
  • Resources rounded to nearest 100,000 tonnes.


The information in this statement of Mineral Resources is based on information compiled by Richard Gaze who is a Member of the Australasian Institute of Mining and Metallurgy and has sufficient relevant experience to qualify as a Competent Person as defined in the JORC Code (2004). Richard Gaze consents to the inclusion of this information in the form and context in which it appears.