Adelaide, Sept 28, 2006 (ABN Newswire) - The Board of Indo Mines (ASX: IDO) is very pleased to announce the completion of the final JORC Code compliant resource statements for the Company's Yogyakarta Ironsands - Pig Iron Project located at Kulon Progo on the south coast of Yogyakarta Province, Central Java, Indonesia.
Based on 929 holes for a total of 14,468m of air core drilling, Perth based geological consultants, Mackay & Schnellmann Pty Limited, have reported a JORC Code compliant global resource at Kulon Progo of:- 605 million tonnes of magnetite-bearing sediment grading 10.8% Fe for the 22km long by up to 1.8km wide deposit.
This equates to an equivalent contained iron of 65 million tonnes of Fe. This global resource includes a JORC Code compliant mineral resource of:- 273 million tonnes of magnetite-rich near surface sand grading 14.2% Fe (at a cut-off of 9% Fe) which is estimated to an average 6m depth from surface which is the proposed initial mining area.
Almost 92% of this tonnage is in the Measured/Indicated category and is tabled as follows:-
SURFACE SAND UNIT (to an average 6m depth from surface)
JORC RESOURCE TONNES GRADE
(at a cut-off of 9% Fe) (Million) (% iron)
Measured 115.6 13.9% Fe
Indicated 134.9 14.5% Fe
Inferred 22.5 14.0% Fe
Total Resource 273 Mt 14.2% Fe
Note: There exists an additional resource of 12.1 Mt
of the surface sand unit grading 8.2% Fe below the cut off of 9% Fe.
The JORC Code compliant Measured/Indicated/Inferred Resource for the Surface Sand Unit at Yogyakarta (to an average 6m depth and at a cut-off of 9% Fe) contains the equivalent of about 39 million tonnes of Fe. This amount of contained iron paves the way for the development of the Yogyakarta deposit, which has enough contained iron for production of 500,000 tonnes of pig iron annually for a minimum of 20 years.
Alternative production scenarios will be investigated in a Bankable Feasibility Study scheduled for commencement by Outokumpu next month. This type of magnetite-rich mineral sand deposit has been successfully exploited in New Zealand for the past 25 years where ironsand is mined and 700,000 tonnes of pig iron are produced annually.
An additional JORC Code resource at Yogyakarta of 46.4 million tonnes of magnetite bearing gravel grading 10.5% Fe (at a cut-off of 9% Fe) exists below the Surface Sand unit at Kulon Progo of which 85% of the tonnage is in the Measured/Indicated category. This is tabled as follows:-
GRAVEL UNIT (below an average 6m depth)
JORC RESOURCE TONNES GRADE
at a cut-off of 9% Fe) (Million) (% iron)
Measured 10.9 10.4% Fe
Indicated 28.8 10.5% Fe
Inferred 6.8 10.3% Fe
Total Resource 46.4 Mt 10.5% Fe
An additional JORC Code resource of 273 million tonnes of magnetite bearing gravel grading 7.5% Fe (below the cut-off of 9% Fe) exists below the Surface Sand unit of which 93% of the tonnage is in the Measured/Indicated category. This is tabled as follows:-
GRAVEL UNIT (below an average 6m depth)
JORC RESOURCE TONNES GRADE
(below the cut-off of 9% Fe) (Million) (% iron)
Measured 125.1 7.2% Fe
Indicated 129.1 7.6% Fe
Inferred 18.7 8.2% Fe
Total Resource 273 Mt 7.5% Fe
It is also significant to note that the northern areas of the Kulon Progo deposit, together with the deeper parts of the deposit, remain untested and there is confidence that considerable additional tonnage potential exists from these parts of the deposit.
Preliminary testwork by Outokumpu Technology has shown that the ironsands at Kulon Progo can be upgraded from 14% Fe to approximately 50%. This was based on single pass gravity concentration. Further testwork using multiple pass gravity and magnetic separation beneficiation techniques is anticipated to increase the iron grade to the required 58 to 60%. The first 10 tonne representative bulk sample of the Yogyakarta ironsands will be sent shortly to the Outokumpu laboratory in Perth for more detailed testwork in order to increase the Fe grade in the concentrate.
The shallow average depth of 6m of the Kulon Progo Surface Sand deposit allows a more environmentally sensitive development of the Yogyakarta project and it is envisaged that the mining of the ironsand deposit will be amenable to simple and cheap dry mining techniques.
The Company will now complete a capital raising and commission Outokumpu Technology Australasia to commence a Bankable level Feasibility Study of the Yogyakarta Project. The program is being funded by Indo Mines as part of its earn-in requirement to acquire a 70% interest in the Project. Indo Mines' partner in the Project, PT Jogja Magasa Mining, will retain a 30% interest in the Project.
Subject to a positive Feasibility Study outcome, the ironsands deposit at Yogyakarta will be used as the basis for the establishment of a liquid iron ("pig iron") making facility in the Yogyakarta Region to provide feedstock for major regional steel producers.
