The Bullamine project is an investigation into the opportunities for developing iron mining (magnetite) operations in the south west part of Western Australia, east from Perth. The project covers over 3,000 km2 under 15 tenements. RLC and Cliffs Asia Pacific Iron Ore Pty Ltd ("Cliffs"), a wholly owned subsidiary of Cliffs Natural Resources Inc. (NYSE: CLF, Paris: CLF), have formed a joint venture under which Cliffs can earn a 75% interest in Bullamine.
Under the joint venture agreement, Cliffs paid $500,000 to RLC on commencement and is spending $5 million to maintain its 75% interest. Subsequent exploration and development to completion of a feasibility study will be funded by Cliffs with RLC's 25% share of these costs repayable out of RLC's share of future mine production. Cliffs is the manager of the joint venture.
An extensive network of rail lines servicing the region's wheat growers and both rail and road links to major bulk cargo ports at Fremantle and Esperance service the region.
Figure 1. Bullamine Project location.
Iron mineralisation identified by Western Mining Corporation in the 1970s was the initial attraction and led to the acquisition of a tenement (E70/2846, granted 5 Oct 2006) adjacent to the town of Northam located 70 kilometres east from Perth. The area of interest rapidly grew following the acquisition of iron interests within E70/2719 & 2720 and application for an additional tenement (E70/3462) abutting to the north. This initial area is shown as the Nor 1 tenement block in Figure 2.
Figure 2. Bullamine project tenements (3,496 km2 at 30 June 2010) in the Northam-Merredin area in south west of WA are shown in blue outline. Tenements are shown draped over regional magnetic data (in places at 1.6 km line spacing). Other projects exploring for magnetite in the area include Yerecoin (Giralia Resources NL (ASX:GIR)) and Jubuk (Magnetic Resources NL (ASX:MAU)). Note that Giralia Resources NL announced to ASX on 7 July 2010 an "Inferred Mineral Resource" estimate of 186.8 Mt @ 30.9% Fe for its Yerecoin Magnetite Project.
Detailed airborne magnetic survey data (200 metre line spacing) over parts of the Nor 1 tenements were acquired during 2007. Processing and interpretation of these data identified a number of targets indicative of rocks prospective for iron minerals.
Drilling in late 2008 at Cleansweep (NOR 1), the first target for which land owner consent to exploration and mining was gained, identified bands of magnetite which testing in 2009 revealed had exceptional processing characteristics (excellent liberation at 500 micron crush) and very low levels of impurities (table 1). 500 micron is half a millimetre, a fine sand not a powder.
sample of chips recovered from the Cleansweep target by RC drilling. Results demonstrate that relatively coarse grind sizes
(80% passing 500 micron) are sufficient to liberate magnetite.
(Assay by XRF, ALS Chemex, 2009, Samples from interval 42 - 50 m bore hole 6)
The limited drilling conducted at the Cleansweep target to date has indicated that the mineralisation here is restricted to a steeply dipping composite main band of about 20 metres thick extending for less than 500 metres strike length. Whilst the dimensions and location of Cleansweep immediately adjacent to a bitumen road make Cleansweep unlikely to be economic to mine, the presence of such high quality and readily processable magnetite is highly encouraging.
During 2009 other companies reported occurrences of high quality magnetite mineralisation in the region. This suggested that the type of mineralisation identified at Cleansweep was not an isolated occurrence and the Company applied for tenements covering the majority of the larger magnetic anomalies evident in regional magnetic data within 150 kilometres of its Northam tenements. At 30 June 2010 the Bullamine project comprised a total area granted and under application of 3,496 km2 covering : Nor 1, Kell 1 to Kell 7 (granted) and Ben 1 & 2 (under application) (refer to Figure 2).
Scout drilling in July 2010 at Nor 1 (E70/3462) intersected magnetite mineralisation at two magnetic anomalies, Bollo 1 and Bollo 2. The Bollo 1 & 2 magnetic anomalies measure in excess of 500 metres and 800 metres strike length respectively. Early results from the drilling suggested the mineralisation occurs from surface within a steeply dipping body of about 20 metres thickness at each target.
In late 2010 extensive airborne geophysical surveys commenced acquiring a total of 39,926 line kilometres magnetic and 3,408 line kilometres Falcon Gravity Gradiometer data from the project tenements. Processing and interpretation of these data during 2011 identified substantial magnetic anomalies, which may be related to magnetite mineralisation, within several of the Bullamine tenements.
Diamond drilling commenced on 17 July 2011 at the Bollo prospect with the joint venture planning to complete a total of 9,700 metres of drilling at various prospects before the end of 2011.
For a general discussion of iron production and the various forms of ore in which iron may be found, please click here.
