Balla Balla Bankable Feasibility Study
Balla Balla Tenement Location MapBalla Balla is the largest and highest grade titanomagnetite iron ore deposit in Australia. The project is located in the West Pilbara mineral field adjacent to key infrastructure, including gas and grid power, and is within 100kms of Australia’s largest iron ore shipping facilities at Port Hedland and Karratha. All Balla Balla tenements are granted and the environmental permitting and project licensing are well advanced.
The company signed a 3 million tpa sales agreement with a large Chinese steel and vanadium producer and subsequently completed a BFS for the mining, production and transport of 3 million tonnes of iron ore concentrate annually from its Balla Balla project. The BFS was upgraded to reflect a 6 million tpa operation following the signing of a second contract for 3 million tonnes per annum.
The BFS study managers, Lycopodium Engineering, and associated consultants have compiled the 6 million tpa BFS which contains all information required to accurately access the technical and financial aspects of Balla Balla operations including the capital and operating cost estimations. Financial analysis show very strong project economics.
Balla Balla Tenements Map
Figure 1: Balla Balla Models showing BFS areaMineral Resources and Ore Reserves
The current JORC compliant ore reserve estimate at Balla Balla is 103.7 million tonnes grading 45.7% Fe and 0.63% V2O5. The reserves are a sub-set of the JORC compliant resource of 116.8 million tonnes grading 45.8% Fe and 0.64% V2O5 within the BFS area. The bulk of additional inferred resources totaling approximately 200 million tonnes are located outside the BFS limits and are the focus of an upcoming drill campaign. Aurox is mobilizing a reverse circulation drill rig from South Australia which is due on site mid-October. Work programmes are being finalised and the rig will commence drilling along the 11 kilometres of the iron ore horizon extending to the east and west of the BFS area. The new drill programme will supplement the existing 138 holes in the extension areas and is designed to delineate at least an additional 200 million tonnes of JORC compliant ore reserves by early 2008.
The Ore Reserve estimate is based solely on the Fe and V2O5 mineralisation contained within the 5km bankable feasibility study (“BFS”) area (see map). Thus enormous potential remains for future resource and reserve increases along the additional 11km titanomagnetite horizon extending east and west of the BFS area.
Ore Reserve Statement
Deposit | Category | Mt | Fe | V2O5 |
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Central | Proven | 27.4 | 45.76 | 0.64 |
| Probable | 16.8 | 44.78 | 0.61 |
| Total | 44.2 | 45.38 | 0.63 |
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Western | Proven | 23.7 | 46.44 | 0.66 |
| Probable | 35.8 | 45.63 | 0.63 |
| Total | 59.5 | 45.95 | 0.64 |
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Total | Proven | 51.2 | 46.07 | 0.65 |
| Probable | 52.6 | 45.36 | 0.62 |
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TOTAL | Combined | 103.8 | 45.71 | 0.63 |
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Notes to accompany Ore Reserve Statement
- Fe cut-off grade is a nominal 25% for fresh and 20% for oxide ore
- Dilution of 3% at a diluted Fe grade of 38.1% is included
- Geological Mineral Resource Model – Golder & Associates Pty Ltd, January 2007
Competent Persons Statement
The Balla Balla Mineral Resource was estimated by Mr Richard Gaze of Golder & Associates Pty Ltd. The Balla Balla Ore Reserve was estimated by Mr Steve Craig of Orelogy Pty Ltd. Both parties have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Persons as defined in the Australasian Code for the Reporting of Exploration Results, Mineral Resource and Ore Reserve. Mr Richard Gaze and Mr Steve Craig consent to the inclusion in this report of the above Resource and Reserve information in the form and context in which it appears.
Balla Balla Project Site LayoutMining
Mining is currently focused within the 5 square kilometre BFS area and will commence with stage 1 open cut pits to approximately 70 vertical metres. The resultant 1 to 1 ore to waste strip ratio will minimize mining costs for the first 5 years of operations. The overall strip ratio for the current 6 million tpa, 11 year BFS mine schedule is 1 to 2.6. Conventional open-cut mining will access 10 million tpa of ore from surface and utilise the following mining fleet equipment:
- Trucks Hitachi EH4500 - 280 tonne
- Excavators Hitachi EX5500 - 520 tonne
- Front-end Loader Le Tourneau 1850T – 230 tonne
When results of the new drilling and subsequent re-estimated reserve calculations are available (early 2008), Aurox will review mine scheduling for production of 6 million tpa of iron ore concentrate from the entire 16 kilometre iron ore horizon.
Balla Balla Process Flowsheet
Balla Balla Proposed Plant Site LayoutProcessing
The excellent magnetic susceptibility of the Balla Balla iron ore allows for 65% recovery as concentrate (by weight) at a coarse, low cost grind size of 106 microns. This beneficiation upgrade will produce 6 million tonnes of saleable iron ore concentrate grading 57% Fe and 1% V2O5 from the 10 million tonnes of ore delivered to the plant each year.
The plant will utilize gyrator primary crusher equipment, SAG and ball mills and a magnetic separation circuit.
Utah Point Multi-User PortConcentrate Transport to Port
Currently Aurox is proposing to pump the iron concentrate via a slurry pipeline to the proposed new Utah Point multi-user facility being developed in Port Hedland. There the slurry will be dewatered and stockpiled before being loaded on small 120,000 tonne Cape sized ships for transport to China. Port costs and capital contributions by Aurox are being discussed.
Balla Balla Project Area
Cattle Grazing Across Balla Balla Project AreaEnvironmental Management
Aurox is committed to responsible and sustainable resource development, using best practicable technology to avoid or minimise negative environmental impacts and to rehabilitate disturbed areas after decommissioning. Aurox engages reputable and well-experienced environmental consultants to advise on and facilitate management of environmental programs, and maintains close and regular consultation with government environmental agencies and other stakeholders, ensuring that all potential environmental and social impacts are identified and addressed.
For the Balla Balla project, Aurox has over the last two years completed detailed baseline environmental impact studies on terrestrial flora and fauna, stygofauna, air quality, hydrology and hydrogeology, heritage, waste management and geochemistry (especially in relation to acid mine drainage risks). These studies have characterised the mining, processing and waste-management operations as low-impact and environmentally manageable using industry-standard methodologies and techniques, as evidenced in informal discussions with government environmental agencies. With relatively small volumes of mine waste, and processing which involves no chemical inputs, efficient environmental protection is expected to be easily achievable.
The Balla Balla project is located almost wholly on cattle-grazing country, with little direct impact likely on nearby natural ecosystems. Importantly, ecologically-sensitive vegetation along main water courses will not be impacted by project development and operation. The project site is well serviced by existing access routes and power and gas grids, so that only minimal land disturbance will be required to link the project with existing infrastructure.
Development
Aurox recently announced a $102 million capital raising from both a placement of shares and issue of convertible notes with institutional investors and a private placement of shares with RockCheck Steel Group Ltd. (see below) This will enable cash deposits to be placed on long delivery time, major processing items such as ball mills and to undertake the infill drilling discussed above.
Environmental surveys are complete. Referral and permitting processes and documentation are being prepared, pending finalisation of hydro and pipeline route an expanded BFS studies.
Aurox Resources has decided to retain 100% ownership rights to the Balla Balla Project. Dilution of project equity is not warranted due to the modest capital requirements (in comparison to other projects of this type) and beneficial Project location with respect to existing infrastructure.