Havilah Resources Ltd (ASX:HAV) has revealed an update on the scoping study and due diligence work program being led by SIMEC Mining on Havilah’s Maldorky and Grants iron ore projects in South Australia, near Broken Hill.
The scope of work is to assess the resource, project life, production, infrastructure and ultimately commercial viability of the iron ore projects.
This work commenced in June 2018 and SIMEC Mining has an exclusivity period until the end of April 2019 in order to complete its work program.
The recent Grants Basin drilling program has confirmed a greatly expanded area of iron ore mineralisation comprising thick, continuous iron formation over an area of at least 3.5 square kilometres.
A new diamond drill hole in Grants Basin completed at a final depth of 624.4 m to obtain metallurgical samples returned an exceptional 486-metre continuous downhole thickness of iron bearing sequence.
The results warrant a resource drilling campaign with the objective of defining a JORC resource of sufficient size to support a viable commercial operation in terms of mine life and processing plant throughput.
An extensive metallurgical testing program was undertaken on Maldorky iron ore drillcore samples using a conventional processing circuit that included crushing and grinding followed by gravity and magnetic separation.
Results to date have demonstrated the targeted product grade of 65% iron and mass recovery level of 40% can be achieved, as well as a high total iron recovery of 85%.
While the initial program was focused on the Maldorky deposit, diamond drillcore from Grants Basin is currently being tested to validate replication for both deposits.
Initial investigations into both rail and slurry pipelines to transport concentrate from the mine site to Whyalla are being carried out.
Findings to date show that the existing east-west Transcontinental rail corridor has capacity to carry an additional 10 million tonnes per annum, with minor modifications only to some of the existing passing lanes.
Further work to investigate opportunities to reduce cost associated with concentrate transport continue.
Pending a favourable assessment of the internal scoping study and successful negotiation of the commercial path forward, a follow up prefeasibility study (PFS) would include the following key steps:
• Additional drilling to establish a JORC mineral resource estimate at the Grants Iron Ore Basin to support the required mine life and design production rate.
• Develop the preferred flowsheet and define supporting infrastructure requirements.
• Evaluate downstream concentrate utilisation and market analysis.
• Finalise strategies to source water and power to support the project.
• Commence environmental baseline studies and stakeholder engagement to support project permitting process.
It is anticipated that the completion of the scoping study will align closely with the end of the current exclusivity arrangement after which a decision to proceed with the PFS can be made.
Havilah technical director Dr Chris Giles said: “Havilah and SIMEC Mining have been able to identify sufficiently extensive iron ore mineralisation in the Grants Basin to warrant an infill resource drilling campaign.
“Comprehensive metallurgical testing of Maldorky iron ore samples has confirmed that it can be beneficiated to a high quality, 65% iron product with favourable yields (40%) and high overall iron recovery (85%).
“These results, along with favourable logistics support progressing to a PFS study in order to determine the prospects of defining a commercially viable mining and processing operation in the region.”