eastern iron make it to the age newspaper

In Garimpeiro's usual Monday jnr miner article. May explain the minor jump in SP yesterday.

Interestingly, the hardcopy of the Age has the following 'intro':

"Some are describing the Platsearch spin-off as the Fortescue of the East" (note previous posts)

:-)

Here is the softcopy version:

Iron-ore boom arrives on the east coast
FitzGerald
April 21, 2008
Page 1 of 2
THE west coast iron-ore boom has arrived on the east coast, in a small way at least with the $5 million float of NSW iron-ore hopeful Eastern Iron.

Managing director Peter Buckley hit town last week and reported that despite the tough times for junior floats of all types, the float - a spin-off from PlatSearch NL - had passed the minimum subscription requirement of $2.5 million. Buckley is an upbeat geologist, but he won't use the description for Eastern - Taylor Collison is the broker to the issue - as the "Fortescue of the East" some are using.

There are similarities. Just as no one thought Andrew "Twiggy" Forrest could break the stranglehold of Rio Tinto and BHP Billiton on the Pilbara iron-ore business, no one has thought of looking at NSW's iron-ore potential - not even the government departments in charge of these things. The last time government boffins looked at the potential - remember NSW is the birthplace of Australia's steel industry, has the right infrastructure and has abundant supplies of coking coal - was in the late 1950s. But nothing came of it.

Eastern is out to change all that, acknowledging up-front the low-grade nature of its channel iron prospects - the Cobar project area and the Main Line project area, west of Parkes.

But the flip side of the low-grade mineralisation (maghemite) is that it is magnetic. Buckley demonstrates just how magnetic by waving a fridge magnet over a sample bag in a city cafe. The lumps jump to the magnet in an instant.

According to the independent geologist's report in the prospectus, separation of maghemite from drill samples has proved successful, increasing the average grades from about 14% to more than 50%. It said: "At grades in excess of 50% the maghemite concentrate becomes a marketable product for blend feed or to further beneficiation options."

It also noted that a "very positive" aspect of the Eastern prospects was that exploration costs, per tonne of proven ore, are likely to to be low, as the drill holes are into shallow, unconsolidated iron-rich material found in extensive and exposed paleochannels.

So Eastern's ambitions don't look as if they will be resource-constrained. Proving beneficiation characteristics and securing access to rail infrastructure and export ports will be the key challenges. However, who is to say that a pig-iron plant based on either the Cobar and Main Line iron-ore prospects shouldn't be part of the consideration. Not all of Australia's iron ore has to go to China.

The 25 million shares in the float are being offered at 20¢ each and there will be a 1-for-2 loyalty options issue four months after listing, with options issued at 1¢ each and with a December 2010 expiry and an exercise price of 25¢ each.

PlatSearch shareholders have priority on the first 10 million in the float. PlatSearch itself is holding 20% of the iron-ore properties and will hold 46% (21 million shares) in a listed Eastern, on the basis the full float gets away as planned.

Timing excellent as 3D Oil gets ready to drillWEATHER permitting, 3D Oil's West Seahorse 3 appraisal well in Bass Strait permit VIC/P57 is due to start drilling next week. The timing of the well, two kilometres to the west of Esso/BHP's producing Seahorse field and the first by 3D since its May 2007 float, could not be better, given record oil prices.

As Garimpeiro previously pointed out, should West Seahorse come in as expected, the plan is to have a single-well development producing at an initial daily rate of 4200 barrels ready to go by 2010. The reserve base is estimated at 10.3 million barrels.

West Seahorse is to be followed up with the drilling of the Wardie prospect from the same drill location.

Seismic interpretation suggests that Wardie could be of a similar size to the West Seahorse.

A shot at a combined 20 million barrels of oil, with other prospects, might normally work wonders on a share price. That hasn't happened with 3D, which began the year at 80¢ a share but has since drifted back to 67¢ a share for a market capitalisation of $138 million, or $A6.90 for each barrel of potential in the current program.

Confirmation that the drill bit is whirring its way to the target horizons in West Seahorse, and subsequent confirmation that its 10.3-million-barrel potential has become a reality, could quickly change all that.

The 25 million shares in the float are being offered at 20¢ each and there will be a 1-for-2 loyalty options issue four months after listing, with options issued at 1¢ each and with a December 2010 expiry and an exercise price of 25¢ each.

PlatSearch shareholders have priority on the first 10 million in the float. PlatSearch itself is holding 20% of the iron-ore properties and will hold 46% (21 million shares) in a listed Eastern, on the basis the full float gets away as planned.