Perth, July 12, 2006 AEST (ABN Newswire) - The Board of Indo Mines (ASX: IDO) is pleased to announce the first JORC Code compliant Inferred Mineral Resource at the Company's Yogyakarta Ironsands - Pig Iron Project located at Kulon Progo on the south coast of Yogyakarta Province, Central Java, Indonesia.
Based on 248 holes on 800m x 100m drill hole centers for a total of 3934m of air core drilling, Perth based geological consultants, Mackay & Schnellmann Pty Ltd, have reported a JORC code compliant Inferred Mineral Resource of 240 million tonnes grading 14% iron (estimated to an average 6m depth from surface) for the 22km long by up to 1.8km wide, magnetite-rich ironsand deposit at Kulon Progo. A larger volume of magnetite-bearing sediments exists below 6m depth but at a lower grade, and has not been included in the Inferred Resource estimation.
At this shallow depth of 6m, it is envisaged that the mining of the ironsand deposit will be amenable to simple and cheap dry mining techniques. It is also significant to note that the first pass drilling only covered about 75% of the ironsand deposit due to access factors and there is considerable additional tonnage potential from these parts of the deposit.
Preliminary testwork by Outokumpu Technology has shown that the ironsands at Kulon Progo can be upgraded from 14% Fe to about 50%. This was based on single pass gravity concentration. Further testwork using multiple pass gravity and magnetic separation beneficiation techniques is anticipated to increase the iron grade to the required 58 to 60%. These techniques have been used successfully on similar magnetite-rich ironsand operations in New Zealand for the past 30 years where 700,000 tonnes of pig iron is produced annually. A 20 tonne representative bulk sample of the Yogyakarta ironsands is currently being prepared from the drill hole retention samples and will be sent to the Outokumpu laboratory in Perth for more detailed testwork in order to increase the Fe grade in the concentrate.
The Inferred ironsand Resource at Yogyakarta (to 6m depth only) contains an iron equivalent of 33.6 million tonnes of Fe. This figure far exceeds the requirement of Indo Mines to delineate an iron resource of 4.5 million tonnes of contained iron, which is enough to supply a minimum production of 300,000 tonnes of pig iron annually for 15 years. Alternate production scenarios will be investigated in a Feasibility Study scheduled for commencement August 2006.
A second pass infill-drilling program (400m x 100m drill hole centers) has already been completed to enable the estimation of an Indicated JORC Code compliant Resource. A third pass drilling program (200m x 50m drill hole centers) is nearing completion, which will involve the infill drilling of around 1/3 of the Indicated Resource drilled area to a density sufficient for the estimation of a Measured Resource.
The Company expects an Inferred / Indicated / Measured JORC Code compliant Resource statement will follow in August. Upon completion of the drilling program, up to 1000 holes for a total up to 16,000m of drilling using two, air core track mounted rigs will have been drilled. To date, more than 800 holes have been completed for a total of over 12,000m of air core drilling.
On completion of the final JORC Code compliant Resource Statement, the Company will commission Outokumpu Technology Australasia to commence a Bankable level Feasibility Study of the Company's Ironsands - Pig Iron Project located near Yogyakarta.
The program is being funded by Indo Mines as part of its earn-in requirement to acquire a 70% interest in the Project. Indo Mines' partner in the Project, PT Jogja Magasa Mining, will retain a 30% interest in the Project.
Subject to a positive Feasibility Study outcome, the ironsands deposit at Yogyakarta will be used as the basis for the establishment of a liquid iron ("pig iron") making facility in the Yogyakarta Region to provide feedstock for major regional steel producers.
Contact
Zlad Sas
Director
Kevin Skinner
Senior Consultant
FIELD PUBLIC RELATIONS
231 South Road
MILE END SA 5031
Tel: (08) 8234 9555
Fax: (08) 8234 9566
Mob: 0414 822 631
kevin@fieldpr.com.au
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