Aurumin (ASX: AUN) has called in the experts to help it assess newly-found iron ore potential at its flagship Sandstone project in Western Australia’s Mid West region, in what could become a significant add-on to its gold prospects.
The company today confirmed it has engaged Southern Geoscience Consultants (SGC) to undertake modelling of the existing geophysical datasets from its past gold exploration activities in a bid to generate iron ore targets and assist in upcoming drill planning. Management believes adding potential high-grade iron ore to its 946,000-ounce gold resource will create synergies in opening the project up for development.
Aurumin last week added a surprising new twist to its exploration journey outside the historic WA mining town of Sandstone when it revealed high-grade rock chip assays going up to 67 per cent iron within outcropping banded-iron formations. The company estimates it has some 6km of discontinuous strike at the site, with outcrop widths ranging from 5m to 40m.
Management is convinced that is more than enough for it to engage the expertise of SGC, with a view to quantifying hopes of a direct shipping ore (DSO) operation to the port of Geraldton. The high-grade iron ore sits close to multiple existing gold deposits at the 881,000-ounce central Sandstone gold project and importantly, on existing mining leases. Multiple lenses have been observed ranging in widths of up to 40m, outcropping at surface and dipping moderately to the north.
The company’s sampling of hematite outcrop returned frequent high grades, with the true width of the mineralisation unknown below surface.
Following SGC’s work that is expected to be completed by the middle of next month, Aurumin says drill-testing of the high-grade iron formations is expected to be part of its immediate priorities.
The potential value of the iron ore in conjunction with the gold could significantly alter the project economics for the company, which is already progressing its broader 946,000-ounce Sandstone gold project towards development.
The SGC work will progress us towards a JORC-compliant exploration target for the iron and assist in drill planning. Aurumin’s focus is firmly on Sandstone and generating the critical mass required for future production. The close proximity of the iron ore to some of our gold deposits, not to mention the potential value of the iron ore itself, could significantly alter the project economics.
Aurumin managing director Brad Valiukas
The Sandstone project area lies 520km north-east of Perth and just 495km east of the Geraldton port within WA’s east Murchison goldfield. It contains the estimated mineral resource of 881,000 ounces of gold and is part of Aurumin’s greater Sandstone operations that include its Birrigrin and Johnson Range projects.
The project lies on a well-known haulage road for DSO iron from the Mid West to the port of Geraldton. Fenix Resources has been hauling along the same route being proposed by Aurumin since 2020 from its flagship Iron Ridge hematite deposit that runs at a remarkable 65.1 per cent iron.
Just this morning, the $264 million market-capped Fenix confirmed it will produce 1.5 million tonnes per year of iron ore for seven years, starting next year from the nearby Beebyn-W11 mine. The company has calculated a net present value (NPV) of $151 million for the operation.
High-grade hematite iron attracts a premium price on the seaborne market, as a purer product results in lower emissions at end-user steelworks in China.
A cash boost from the sale of the historic Mt Palmer gold mine to Kula Gold and significant divestment of its Mt Dimer tenements last year to Beacon Minerals for a handy $3 million, coupled with a recent $2.5 million capital raise, has set Aurumin debt-free.
With the Olympic Games having started this week in Paris, the company is adamant it is still going for gold at Sandstone. But the iron ore potential has added an intriguing new edge for it to track in its Mid West field.
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