"Nevada Iron (ASX: NVI) has received assays from drilling on line 5 within the Section 5 deposit at the Buena Vista Iron Project in Nevada, which again show the thick, higher grade nature of the mineralisation being unearthed.
They attest further evidence of the quality of Buena Vista.
Better intersections include 67.1 metres at 26.3% total iron from 14 metres, 33.6 metres at 23.8% total iron from 39.6 metres, and 120.4 metres at 23% total iron from 59.5 metres.
Mick McMullen, executive chairman, told Proactive Investors today the drilling at Section 5 was aimed at proving up some high grade feed for the mine plan in the first three years, which it has done very nicely.
“The next steps for the project are to complete the update of the feasibility study which will incorporate the latest results from the drilling and the enlarged project scope and carry on with the permitting.”
Section 5 and several other deposits are prospects proximal to the proposed processing plant site at Buena Vista. These could potentially provide multiple sources of mineralisation for both increased production and greater operational flexibility during the initial years of mining operations.
Drilling results returned for line 5 again demonstrate the presence of thick zones of magnetite mineralisation in the main portion of the Section 5 deposit.
The historical Southern Pacific drill hole, SP05, indicates that higher grade magnetite mineralisation, 89.8 metres at 25.6% total iron from 147.9 metres, extends at depth below the level of current drilling.
Drill holes 5B and 5C were planned to test for this mineralisation at depth but terminated early due to drilling difficulties.
Thick, higher grade magnetite mineralisation previously reported in hole 2BB – three combined mineralised intervals totalling 176.4 metres at 28.1% total iron – that trends at about 135 degrees has now been confirmed to extend from line 2 to line 6.
The higher grade zone is about 250 metres long by an average of 100 metres wide by an average of 150 metres thick, which grades over 25% total iron.
This higher grade mineralisation is prevalent on line 5 in the historical Southern Pacific holes that included intercepts of 134 metres at 33.4% total iron, 128 metres at 36.7% total iron, 124.8 metres at 23.9% total iron and 89.8 metres at 25.6% total iron; and confirmed by holes 5E, 120.4 metres at 23% total iron, and 5F, 67.1 metres at 26.3% total iron.
The higher grade mineralisation is also present on line 6 in holes SP03, 137.9 metres at 30% total iron; SP16 136 metres at 22.3% total iron; and previously reported holes 6F, 69.5 metres at 22.4% total iron; and 6G, 50.3 metres at 27.6% total iron.
Exploration upside
The Section 5 deposit has an exploration target of 12 to 18 million tonnes at 18% to 26% total iron. Providing the upside, the project’s currently identified exploration targets provide for an additional 195 to 268 million tonnes of exploration potential.
Drilling at the Section 5 deposit has encountered thick magnetite mineralisation in an oval shaped area of some 600 metres east to west by 50 to 400 metres north to south and to depths of 200 metres, where several holes were terminated in strong mineralisation.
The mineralisation is close to the surface and lies beneath less than 20 metres of cover sediments.
Analysis
Buena Vista ore has proven to be significantly different to other magnetite ores in that the iron readily upgrades without the need for expensive fine grinding. The benefits from this will be seen in project economics. Some investors may be missing this point.
The project has also previously demonstrated its potential to host not only thick magnetite mineralisation, but also substantial grades, as evidenced by an intersection of 10.7 metres at 53% total iron.
Nevada Iron’s metallurgical test work is proving that even low grade Buena Vista ore upgrades, at a significantly coarser grind than typical banded iron formation (taconite) magnetite ore, to produce high quality clean concentrate grading 67.5 to 69% iron.
The company has completed an aggressive exploration program to increase and expand the existing JORC resources and convert known higher grade exploration targets and prospects to JORC resources.
The program at the Section 5 deposit and a number of other prospects is consistent with the goal of increasing the resource base to support the case for the future expansion of the project.
With Mick McMullen (executive chairman of $128M capped gold producer Lachlan Star) taking on the role of executive chairman arranging financing and overseeing the development of the Buena Vista Iron Project, the project and Nevada Iron has strong catalysts for valuation upside.
Proactive Investors believes that Nevada Iron will be re-rated in the next 6-12 months from its current $0.14 to $0.20-$0.30 and that North American investors will increasingly act as a lightening rod for valuation change given the location of the Buena Vista asset."
NVI Price at posting:
84.0¢ Sentiment: LT Buy Disclosure: Held
