Shares in African Aura Mining (LON:AAAM, TSX-V:AUR) jumped 12% in early trade today after the group reported intersecting significant widths of banded iron formation on its Nkout project in Cameroon.
To date, the company has intersected 75 metres of hematite BIF and 195 metres of magnetite BIF after completing for 950 metres of initial 4,200 metre programme.
A second in-house rig is currently being mobilised to the site to accelerate the resource definition programme with the project “firmly moving towards a maiden resource estimate”. Drilling of the current first phase is expected to be complete in November this year.
African Aura is drilling the primary 8 km (kilometre) long target with 30% set to be covered by the maiden resource estimate.
Previous grab sampling returned up to 68% Fe (iron), averaging 55% Fe from 55 samples.
Receipt of the first batch of assay results from holes NKDD002 and NKDD003 is also expected in November, while results from preliminary metallurgical test work on samples of core collected from the current drilling programme will be available in Q1 2011.
“It is very encouraging to report that we have intersected significant widths of hematite and magnetite BIF mineralisation at Nkout.
“Nkout has the potential to evolve into a very significant iron ore project. We look forward to receipt of the first batch of assay results,” said president and chief executive o Luis da Silva.
African Aura noted that Nkout has a combined geophysical signature of 20 km, making it larger than the company’s Putu iron ore project in Liberia, while also having an “excellent strategic location” within 30 km of the proposed rail line linking the coast to the 2.5 Bt (billion tonne) Mbalam iron ore project.
African Aura has three principal iron ore projects in Cameroon, namely Nkout, Ngoa and Akom Hills. According to the company, their dimensions represent a potentially significant iron ore asset.
In addition to the 8 km target, another 12 km of “moderately magnetic and prospective” targets exist around Nkout.
In addition to the 100% interest in Nkout, the company’s iron ore division holds a 38.5% stake in the Putu iron ore project.
The gold division includes the 1.4 million ounce New Liberty gold deposit, which is advanced through a bankable feasibility study, and the proximal Weaju, Gondoja and Silver Hills projects, all in western Liberia.
African Aura also holds a 30% stake in AIM listen diamond producer Stellar Diamonds (LON:STEL).