Adelaide, Oct 17, 2006 (ABN Newswire) - Sphere Investments Ltd (ASX: SPH)(PNK: SVESF) has announced that the mineral resource for the Guelb el Aouj East Deposit in Mauritania has been upgraded to 701 million tonnes (Mt), from 450Mt announced by the Company 12 months ago, as the result of the latest drilling campaign.

The 2006 drilling campaign also lifted the resource classification at East Deposit from Inferred only, to Measured, Indicated and Inferred. This has boosted the total mineral resource for the two Guelb el Aouj deposits drilled so far (East and Centre Deposits), to 926Mt @ 36.3% Fe with significant sections remaining undrilled.

In-situ iron grades within East Deposit's magnetite-quartzite host rock have averaged 36.3% Fe to produce a concentrate grade of 70.2% Fe at a mass recovery of 45.2% on Davis Tube magnetic separation analysis.

Sphere said today the new resource estimate for East Deposit, significantly exceeded the objective of the drilling program. The upgraded estimate includes a combined Measured and Indicated Resource of 501Mt. "At a planned mining rate of 17Mt/a, that is enough for 30 years," Sphere's Managing Director, Mr Alexander Burns said.

"The drilling results have also reconfirmed the East Deposit's premium quality for making direct reduction (DR) grade pellet feed, suitable for producing DR pellets," Mr Burns said.

The upgraded estimate follows the completion of this year's 31,300 metre resource definition drilling campaign at Guelb el Aouj East. Fresh mineralisation extends from 50m below surface to a total vertical depth of 450m in the deepest part. The full result for East Deposit's resource, above a 20% Fe cut-off, is detailed below:

Resource
Classification  Mt (dry) Fe %   SiO2 %  Al2O3%   LOI %  DTCFe % DTC Mass %
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Total
(20% Fe cut-off)701     36.3    43.5    1.04    -0.70   70.2    45.2
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Consisting of:
Measured        188     35.5    44.3    1.32    -0.71   70.1    44.1
Indicated       313     36.8    43.0    0.89    -0.64   70.2    46.4
Inferred        200     36.3    43.5    1.02    -0.80   70.2    44.3
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Sphere is developing the Guelb el Aouj Iron Ore DR Pellet Project in a joint venture with Societe Nationale Industrielle et Miniere (SNIM), Mauritania's iron ore exporter.

SNIM is the world's seventh largest supplier to the seaborne traded market in iron ore and currently exports 12Mtp/a of iron ore to markets in Europe and North Africa.