Adelaide, Aug 15, 2006 AEST (ABN Newswire) - Metallica Minerals Limited (ASX: MLM) associate, Cape Alumina Pty Ltd, has commenced ground preparations for a 580 hole drilling programme on its Cape York Peninsula bauxite project with the goal of outlining an initial resource of up to 100 million tonnes to potentially supply the surging Chinese alumina-aluminium market.
Drilling on the Wenlock bauxite deposit by Cape Alumina - owned 50% by Metallica and 50% by a private resource investment company, is the first exploration for more than 30 years on the tenement which is adjacent to mining leases owned by Alcan and Comalco.
Metallica Managing Director, Mr Andrew Gillies, said the drilling program will evaluate an area of 37 square kilometres of mapped bauxite on EPM14547 "Wenlock" and follows the formal granting of the tenement by the Queensland Government in April.
"As a junior resource company focused on bauxite, Cape Alumina is in the unique position of having a large tenement holding in one of the most prodigious bauxite production areas in the world," Mr Gillies said.
"The current drilling program is designed to generate the information to support an initial resource model and resource estimation statement, compliant to the JORC Code, for the Wenlock deposit, which we hope to finalise by December".
"The Wenlock deposit, which extends onto an adjoining tenement application held by Cape Alumina and covers a total area of 65 km2, is an extension of bauxite mineralisation on adjacent mining leases owned by Alcan and Comalco. Part of the Wenlock deposit was evaluated by CRA (now Rio Tinto) between 1970 and 1974 resulting in the delineation of extensive bauxite mineralisation with an average beneficiated grade of 53% Al2O3, 8% Reactive Silica and 7% Fe2O3.
"The average grade of the deposit appears to be similar to that of the Aurukun deposit south of Weipa, the subject of an international competitive bid process by the Queensland Government and now under a feasibility study by Aluminium Corporation of China Limited (CHALCO).
"The Wenlock bauxite appears to have similar grades to the Aurukun bauxite; however, unlike the Aurukun bauxite, early work conducted by CRA suggests that the Wenlock deposit might be preferred by alumina refineries due to its different mineralogy that could be treated at lower refinery temperatures."
Cape Alumina Chief Executive Officer, Dr Paul Messenger, said an in-house desk-top scoping study completed in February 2006 indicated that development of Cape Alumina's Wenlock deposit as a feed stock for Chinese alumina refineries could be viable based on current estimated global bauxite prices of US$25-$35/tonne FOB. In July, Cape Alumina abandoned its Kalumburu bauxite tenements in Western Australia following an internal review, in order to concentrate on its larger, better grade and more favourably located bauxite project in Cape York.
"Cape is continuing to investigate future marketing options for Wenlock bauxite, particularly in China. Chinese alumina refineries imported 2 million tonnes of bauxite in 2005 and this is expected to rise to over 5 million tonnes this year due to the rapid expansion of Chinese alumina refinery capacity coupled with limited domestic bauxite reserves," Dr Messenger said.
"Due to a combination of factors, including continued above average growth of the Chinese economy, the higher cost of treating Chinese domestic bauxite, and the low capital and operating costs of Chinese alumina refineries, we expect that future demand for FOB bauxite sales to China will continue to grow rapidly. Much of the world's bauxite resources are held by relatively few established alumina/aluminium companies, and a significant proportion of those resources are located in geopolitically unstable regions. There is therefore a growing trend amongst Chinese refineries to seek equity in foreign bauxite projects for long-term resource security."
The initial drilling programme for EPM14547 will comprise a total of 580 shallow aircore holes. Drilling will be conducted on a nominal 320 x 320 metre grid with an initial resource model and statement expected to be released by December. Cape Alumina is seeking to establish a bauxite resource at Wenlock of between 50 and 150 million tonnes and it is hoped that the initial drilling programme on EPM14547 will outline 50-100 million tonnes of this.
Contact
Peter Gill
Senior Consultant
FIELD PUBLIC RELATIONS
231 South Road
MILE END SA 5031
Tel: 08 8234 9555
Fax: 08 8234 9566
Mb: 0417 784 059
peter@fieldpr.com.au
| ||
|
