Pilbara Iron Ore Project (PIOP)

Location and Surrounds

The PIOP is located in the Pilbara region of Western Australia, approximately 60 km north-west of the town of Tom Price. The PIOP consists of the Blacksmith and Anvil tenements. The Blacksmith tenement forms the basis of Flinders Mines’ Bankable Feasibility Study and is located between a number of existing and proposed developments. To the north is Rio Tinto’s Caliwingina iron ore resource, to the east is FMG’s Solomon iron ore hub, to the west API’s West Pilbara Iron Ore Project and to the south, Rio Tinto’s Brockman 2 operations. The Anvil tenement is located approximately 10 km to the south-west of Blacksmith.  In February 2014, Flinders Mines signed an Alliance Agreement with Rutila Resources for access to port and rail infrastructure that provides the PIOP with a realistic path to market.

The Pilbara Iron Ore Project is located in the Pilbara Region of Western Australia
The Pilbara Iron Ore Project is located in the Pilbara Region of Western Australia

History

The PIOP commenced in May 2003 as a joint venture between Flinders Diamonds Limited (now Flinders Mines Limited) and Prenti Exploration Pty Ltd (Prenti). In March 2005, Flinders and Prenti agreed with Fortescue Metals Group (FMG) to swap commodity rights on some of the PIOP tenements, with FMG taking the iron ore rights. One tenement, E47/882 (Blacksmith), was not included in this transaction. It is this tenement in which Flinders has a 100% ownership interest. In May 2007, Flinders decided to investigate the iron ore potential of Blacksmith following the announcement of FMG’s Serenity deposit and Rio Tinto’s Caliwingina deposit.

On 22 November 2007, an exploration target of 325 – 390 Mt of iron ore at a grade of 45 – 60% Fe was announced. On 30 June 2008, Flinders purchased tenement E47/1560 (Anvil) from Cazaly Iron Pty Ltd. The first drilling campaign on Blacksmith commenced in August 2008 leading to a maiden Inferred Resource of 476 Mt at 55.4% Fe, announced on 1 April 2009.

Further drilling in the 2009 campaign extended this resource to 511 Mt at 55.4% Fe, as announced in August 2009. In April 2010, Flinders announced its first Indicated Resource estimate at the Delta deposit of 157 Mt at 56.5% Fe and a new global Mineral Resource of 550 Mt at 55.6% Fe.

The global Mineral Resource was subsequently increased to 748 Mt in October 2010 and 917 Mt in November 2011.

During the exploration drilling phases Flinders earned a 100% stake in the tenements in the Prenti joint venture, with a residual 5% net royalty payable to Prenti. On 11 November 2011, Flinders announced that the royalty was acquired by Flinders from Prenti for a cash settlement and a 5% net profit production royalty in respect of non iron ore commodities in the tenements that were the subject of the JVA. As a result, Flinders now has an unencumbered 100% ownership of the iron ore in the PIOP tenure.

Mining Lease M47/1451 (Blacksmith) was granted by the Western Australian Department of Mines and Petroleum on 26 March 2012.

Project Feasibility

In January 2011, Flinders announced positive results from a 13-month prefeasibility study (PFS) in respect of the PIOP that was managed by WorleyParsons. The PFS confirmed that the PIOP is economically robust and technically viable. The PFS confirmed a defined iron ore Mineral Resource and mineralised inventory at the PIOP. The PFS was conducted on the basis of an initial production rate of 5 Mtpa and then 15 Mtpa after year 5.

With the signing of the Alliance Agreement with Rutila Resources, the basis of the project has increased to one that will produce 25Mtpa.  A Bankable Feasibility Study (BFS) has commenced and is expected to be completed mid 2015 with the FMS Board to make the Final Investment Decision (FID) by the end of 2015.

Environmental Reports

Click here to view PIOP EPA environmental reports

Mineral Resources

The PIOP currently hosts a Mineral Resource of 1,042Mt at 55.6% Fe, based on a 50% cut-off grade, which has been compiled in accordance with the 2012 JORC Code.

A breakdown by Resource category is shown in Table 1.

Table 1 – Mineral Resources

Cut-off at 50% FeMtFe %SiO2 %Al2O3 %P %LOI%
Measured 105.3 56.4 10.5 5.1 0.05 2.8
Indicated 792.2 55.7 8.9 4.5 0.07 6.0
Inferred 144.4 54.4 10.8 5.3 0.06 5.0
Total 1,042 55.6 9.3 4.7 0.07 5.5

Source: Flinders Mines Announcement, 9 January 2015.
Note: See Competent Persons Statement below in relation to this Mineral Resource.

PIOP Resource areas
PIOP Resource areas

Mineralised Inventory

The total mining inventory within the pit designs is summarised in Table 2. Final product tonnes and grades are quoted as tonnes of product after beneficiation. Overall, Flinders is expecting >250 Mt of final product after beneficiation. Flinders' recently upgraded Mineral Resource of 1,042 Mt is being integrated into the BFS, currently being undertaken by WorleyParsons.

Table 2 – Total Product Tonnes and Grade

 ProductTonnesFe %SiO2 %Al2O3 %P %LOI%
Flinders Fines >250 Mt 58.5 6.00 3.30 0.095 6.95

Source: Flinders Mines Investor Presentation, 3 December 2014.
Note: See Competent Persons Statement below in relation to this Mineral Resource.

Geology

Outcropping basement geology in the Blacksmith tenement comprises Brockman Iron Formation (BIF), which is known to host large BID deposits in other regions of the Hamersley Ranges. Incised into this bedrock geology are large channel systems, which can hold significant tonnages of CID and DID. Formed by cyclic weathering and erosion of BIF, these channels may host accumulations of iron-rich gravels distal from any obvious hard-rock iron mineralisation. These deposits represent excellent economic targets as they are near-surface and easy to mine.

The hematite-rich DID ore includes all mineralisation that has been deposited in channels from the surrounding banded iron formation, and is primarily composed of detrital material of either pisolithic or fragmental types. The BID ore is generally located beneath the DID deposits in the underlying Dales Gorge and Whaleback Shale Members of the Brockman Iron Formation, and is more prevalent in the margins and in the headwaters. In some parts of the lower reaches of Delta and Eagle, CID mineralisation occurs between the DID and BID material.

Competent Person Statement

The information on this page that relates to Exploration Targets and Exploration Results is based on information compiled by Dr Graeme McDonald who is a Member of The Australasian Institute of Mining and Metallurgy. The information that relates to the Mineral Resource Estimate has been compiled by Mr Paul Blackney of Optiro Pty Ltd. who is a Member of the Australasian Institute of Mining and Metallurgy. Both Dr McDonald and Mr Blackney have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that they are undertaking to qualify as a Competent Persons as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr McDonald and Mr Blackney consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

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