Mount Oscar Iron Ore Project (Western Australia)

Overview and Exploration

Background

Apollo Minerals has 100% interest in three Exploration Licences comprising the Mount Oscar Project in the Pilbara Region of Western Australia.

Location

Apollo Minerals Mount Oscar Project is located 45km from the busy commercial and industrial centre of Karratha which is 1,560km north of Perth, the state capital of Western Australia. Roebourne is the nearest small community being 20km to the north of the project.

 

Mount Oscar Project Location

Multiple infrastructure projects in close proximity to the Mount Oscar Project are either in place or in advanced feasibility stages. These developments will allow Apollo Minerals to position its interests in line with a number of emerging producers with similar requirements.

Access to the Mount Oscar Project from the west is from the Roebourne/Harding River Dam road with the turn-off 12km from Roebourne and then dry weather station track access for 6km. The route crosses the Harding River which is dry for most of the year and flows only after significant rainfall events such as the passing of a cyclone.

The Robe River heavy railway leading to the Cape Lambert load out facility also passes through the western portion of the Project area.

Geology

The Mount Oscar Magnetite Project is located in the north-western part of the Pilbara Craton. The hematite-magnetite mineralisation found at Mount Oscar lies within the Cleaverville Formation occurring as banded iron formation (BIF) interbedded with cherty and fine-grained clastic sedimentary rocks. Dolerite sills are very common.

The magnetite-bearing rocks at Apollo Minerals' Mount Oscar Project crop out strongly over an oval shaped area measuring some 5km by 2km.

     

The Magnetite Rich Horizon - Example of Unit A in the North-East Corner of the Prospective Area

The BIF horizons are strike-continuous for up to 5.5 kilometres and are locally up to 160m thick within E47/1379. Although of variable thickness, the magnetite-rich portion of the BIF is commonly in excess of 60m wide. The magnetite mineralisation occurs in both the Apollo Minerals tenement E47/1379 and the adjoining tenement E47/1217 to the west. BIF of the Cleaverville Formation also occurs at the Mount Oscar East prospect within E47/1304.

The magnetite-rich rocks are dark coloured, almost black in outcrop and dark blue to black in hand specimen. The magnetite mineralisation occurs as laminations from 1mm thick to layers of beds up to 10mm thick that alternate within the layered rock with cherty bands of similar thickness.

Horizons of magnetite-impoverished, cherty BIF occur and have only a weak or no magnetic signature. The cherty BIF has been noted in hanging wall to the magnetite rich horizons and also as separate ridges with no association to the magnetite rich horizons.

 Magnetite Mineralisation Showing Bands up to 10mm Thick of Bright Blue Magnetite Alternating with Dark Grey Bands of Silica

Exploration Completed by Apollo Minerals

Rock Chip Sampling

Apollo Minerals completed a rock chip sampling programme in 2008 within the prospective portion of E47/1379.

Eighty samples were collected with a highest iron grade reported of 55.82% Fe. Four samples reported over 50% Fe and twenty-two exceeded 40% Fe. These results are considered high for a magnetite style of mineralisation as assays from 30% Fe to 40% Fe are more commonly reported from rock chip samples of magnetite mineralisation.

Apollo Minerals completed a rock chip sampling programme over a portion of the Mount Oscar East prospect in November 2010. Fifteen of sixteen samples collected reported head grades in the range 32.80 - 41.36% Fe with low Al2O3. The arithmetic average head grade of 35.6% Fe is the same as that reported from sampling of Mount Oscar in 2008. On the basis of rock chip assays alone the iron mineralisation at Mount Oscar East is of a similar tenor to that at Mount Oscar.

Aerial Magnetic and Radiometric Surveys

A high resolution aeromagnetic survey was commissioned during 2008 over the Mount Oscar target defining intense magnetic anomalism. The data from this survey has been merged with multi-client data to extend the magnetic coverage to all of the magnetite prospective area at Mount Oscar.

Results of the survey indicated areas of very intense magnetic anomalism at Mount Oscar both within the Apollo Minerals ground and the adjoining ground to the east, as depicted as shades of white in the following figure.

 

In April 2009 Southern Geoscience Consultants (SGC) prepared a geophysical interpretation of the Mount Oscar Project including the Mount Oscar East tenement (E47/1304).

The resulting combined exploration target for Apollo MineralsMount Oscar and Mount Oscar East tenements is modelled by Southern Geoscience Consultants (SGC) to be 350 to 650Mt magnetite-bearing BIF with grades of between 31% and 37% iron. This modelling is based on interpretation and modelling of geophysical data, rock-chip sampling and the December 2009 RC drilling information from Mount Oscar, and geophysical data and rock-chip sampling at Mount Oscar East.

Mount Oscar Banded Iron Formation Exploration Target based on Geophysical Interpretation

Modelled Exploration Target Tonnage
Apollo Minerals Prospects	Minimum Million Tonnes	Mid-range Million Tonnes	Maximum Million Tonnes	Fe Grade
Mount Oscar BIF	300	400	500	31-37%
Mount Oscar East BIF	50	100	150	31-37%
Total	350	500	650	31-37%

Geological Mapping

Apollo Minerals completed a detailed mapping programme during March and April 2010 that covered all iron prospective BIF outcrop within Apollo Minerals tenement at Mount Oscar.

Based on this mapping, the BIF sequence in the north of Apollo Minerals 100%-owned EL 47/1379 has been shown to comprise four main units, three being BIF units with distinctively different characteristics and the fourth being the intervening dolerite sills. The whole BIF sequence, including intervening mafic volcanic lenses, would have been deposited prior to the intrusion of numerous dolerite sills which have been controlled by various phases of faulting.

Due to the structural complexity of the area the relative ages of these units is uncertain but it would appear that the oldest BIF unit is that designated as BIF A, younging through BIF B, to BIF C and D. The latter were initially considered to be distinct units but this has since been reassessed and the two are considered to be the same upper part of the sequence.

BIF A is characterised by the well-banded form of BIF, comprising an estimated 60% jasper and 40% magnetite developed as alternating red and black bands. The magnetite occurs as both fine-grained layers and as coarser-grained layers intergrown with silica. Underlying BIF A is a meta-volcanic-metasiltstone package.

BIF B was originally lithologically connected to BIF A, as evidenced by a narrow remnant section of BIF A found attached to BIF B, but was consequently split apart with the introduction of dolerite presumably along fractures. The BIF B package contains numerous 5-15m wide layers of chert-rich, commonly silica-altered magnetite-poor BIF, interbedded with numerous metavolcanic-metasiltstone layers. There is an internal portion of BIF B that comprises laminated chert and magnetite that is continuous along the length of the main outcrop of BIF B.

There is no field evidence that BIF C (and D) was spatially associated with BIF B because of the thick intervening dolerite sill. BIF C (and D) comprises glassy looking magnetite (ie probably very fine grained) and a dark chert. Rare ferruginous siltstone bands and a larger meta-volcanic unit exist within this sequence.

Overall the area is dominated by the dolerite sills which comprise a fine-grained matrix of feldspars and mafic minerals with porphyroclasts of feldspar and quartz. The dolerites have chilled margins and a foliation that mimics the BIF layering. Minor quartz breccia zones occur that pre-date the intrusion of the dolerite sills.

Structurally the area has undergone a long and complex history of deformation. At least four folding styles have been identified in the field, along with a number of foliations that have yet to be accounted for by specific folding events.

 

  Mount Oscar Detailed Geological Mapping

 

  Detailed Geological Mapping 2010 Key

The first folding event (F1) is characterised by upright isoclinals folds, evidenced by type 1 fold interference patterns (observed in BIF B) and as large isoclinal (internal) folds in BIF C folded aroundF2. The differing intensity of F2 deformation and F1 orientation provides evidence that BIFs A and B were spatially separate from BIF C (D).

The second folding event (F2) is represented by intense isoclinal folding that has transposed the bedding parallel to the F2 axial plane. The transposition of layers parallel to the axial plane gives the false impression that the current strike is that of the original bedding. The foliation of F2 (being S2) is the dominant fabric at Mount Oscar as it forms the east-west trending topographic highs. A large-scale F2 fold is evident in the antiforms/synforms of BIF C.

The quartz breccias are cut by the intruding dolerites, and display the dominant S2 foliation, indicating their timing is pre-F2, and they are probably related to F2 or F1 thrusting.

The dolerites display a foliation that mimics the BIF dominant foliation (mostly at the contacts) suggesting that the dolerite intruded either at the same time or prior to the F2 event.

F3 folds are shown as the tight/open straight limbed kink folds (with rounded hinges). F3 folds the dominant foliation (S2) which is evident in the three BIFs.

The F3 hinges themselves are openly folded by F4, as observed in BIF B. The fold axial trace is in the same orientation as the large scale folding highlighted by the aeromagnetic geophysical survey.

Two foliations remain to be categorised. Both are incipient slatey cleavages that are commonly spaced at about 2-5cm. The earlier fabric is a sub-horizontal foliation observed in BIF B, while the other is a sub-vertical foliation observed throughout the area. Both are pre-F3 and post-F2.

BIFs A, B and C (D) were deposited temporally together with BIF C (D) being spatially removed. The package was folded in a large scale isoclinals event (F1) producing the quartz breccias along probable thrust faults. Then upright F2 refolded the BIFs. The dolerites most likely intruded syn-F2 along planes of weakness such as quartz breccia faults. BIFs A and B were then strike-slip faulted against the less deformed BIF C package, probably accounting for the sub-vertical foliation. F3 kink folding then deformed all three BIFs, and associated faulting relocated BIFs A and B up against BIF C in the north of the tenement. Finally, F4 open/tight folds refolded all prior fabrics and packages, and this is related to the major northeast trending strike-slip fault that truncates BIFs A and B in the east

RC Drilling Programmes

Two RC drilling programmes have been completed by the Company as follows:

Collar locations and drilling directions for all holes are shown on the plan.

 

Apollo Minerals Drillhole Locations

 The initial drill programme was designed to target the highest magnetic amplitudes as modelled by SGC. Five holes were drilled on four drill profiles that are approximately 200 metre-spaced sections, to provide a test of 800m strike of horizons C and D.

The weighted average results for selected elements comprising the magnetite mineralisation intercepted in each hole is shown in the table.

Downhole intercepts of magnetite mineralisation ranging from 16m to 168m having iron grades ranging from 31.9% to 36.9% have been encountered within C and D horizons. The average iron grade for the intercepts is 35.2% Fe. The mineralisation remains open at depth and along strike for both horizons with the deepest holes extending to a vertical depth of 300 metres. Shallow cumulative intercepts of 271m @ 34.8% iron and 192m @ 35.9% iron were returned from a depth of 14m in OSRC004 and 25m depth in OSRC001 respectively.

Several individual composite assays exceeded 40% iron with the highest being 43.8% iron returned from the 5m composite sample comprising drill intercept from 74m to 79m in OSRC004.

 

 

Mount Oscar Drill Sections (Stage 1 Drilling Programme)

Units C + D

RC Drilling Results for Apollo Minerals First Programme at Mount Oscar Project.

Drillhole location details				Intercept			Head Assays
Hole_ID	Easting	Northing	Azimuth/dip	From	To	Interval	Fe	SiO2	Al2O3	P	S	LOI
	(MGA94)	(MGA94)	(degrees)	(m)	(m)	(m)	(%)	(%)	(%)	(%)	(%)	(%)
OSRC001	520100	7687042	210o/-60o	25	48	23	31.9	39.3	3.1	0.05	0.60	3.96
OSRC001				51	87	36	34.6	39.1	2.8	0.05	0.07	2.98
OSRC001				215	348	133	36.9	37.7	2.0	0.05	0.33	1.55
OSRC002	519834	7686900	Vertical	83	99	16	34.6	39.7	2.6	0.06	0.69	1.99
OSRC002				108	168	60	36.0	40.0	2.2	0.05	0.49	0.68
OSRC003	519834	7686900	210o/-55o	31	199	168	35.3	39.9	2.2	0.05	0.32	1.64
OSRC004	520411	7686890	210o/-60o	14	153	139	36.0	39.9	2.4	0.05	0.25	0.97
OSRC004				163	188	25	34.9	38.0	3.0	0.05	0.05	2.50
OSRC004				198	233	35	33.0	39.9	3.1	0.05	0.16	2.91
OSRC004				247	266	19	32.5	41.7	3.0	0.05	0.22	2.08
OSRC004				282	335	53	33.5	41.4	2.8	0.06	0.14	1.77
OSRC005	520226	7686936	210o/-60o	41	69	28	33.5	42.0	3.3	0.06	0.32	1.19

 

 

 

Apollo Minerals second drilling programme was undertaken at Mount Oscar over BIF Unit A South during early November 2010. Four holes were drilled for 732m and intercepts of magnetite-bearing BIF were recorded in three of the four drillholes.

Drilling of Unit A was planned as this unit was seen to host some slightly coarser, albeit still fine grained, magnetite than that seen in Units C and D.  In addition, the explorer to the west has reported a resource estimate of 72.4Mt @ 34% Fe head grade based on 27 RC holes and 7 diamond holes in TMI anomalies 1 and 2 which are along strike from Apollo Mineral Unit A South.. Total BIF intersections were 106m, 111m and 66m in holes from west to east. The BIF horizon comprise strongly jaspilitic, pink to red BIF that is variously magnetite bearing.  The magnetite rich portions are grey to dark grey in colour and these occur along with wide intercepts of mostly low iron bearing red chert within the BIF horizon, together with amounts of shale.

Mount Oscar Drill sections (Stage 2 Drilling Programme)

Unit A

 

Table 4: RC Drilling Results for Apollo Minerals Second Programme at Mount Oscar Project

Drillhole Location Details				Intercept			Head Assays
Hole_ID	Easting	Northing	Azimuth/ dip	From	To	Interval	Fe	SiO2	Al2O3	P	S	LOI
	(MGA94)	(MGA94)	(degrees)	(m)	(m)	(m)	(%)	(%)	(%)	(%)	(%)	(%)
OSRC006	519300	7686020	180/-55	114	209	95	34.3	39.3	2.9	0.05	0.26	6.13
OSRC007	519660	7685360	180/-70	91	177	86	33.5	35.8	1.4	0.04	0.09	8.94
OSRC008	520,080	76,785,400	180/-70	87	122	35	34.7	37.7	2.3	0.04	0.05	6.96
OSRC009	519,260	7,686,070	260/-55			0

Notes:

1) Intercept widths are apparent and not true widths.

2) Sample intervals are 1 metre.

3) Assays quoted are head assays.

4) Assays performed by AMDEL Mineral Laboratories under the supervision of Promet Engineers.

 

Metallurgical and Processing Testwork

Apollo Minerals commissioned an independent consulting mineral processing group to undertake a programme of Davis Tube Recovery (DTR) and metallurgical testwork in early 2009. Samples were taken from RC drill chips obtained during the Company’s drilling programme that tested Units C and D at Mount Oscar.

DTR results at P80 38 microns from twelve composite intervals based on 151 individual samples selected from the drill samples are shown in the table. Individual DTR results were up to 64.0%Fe with an average of 58.0%Fe. Mass recovery peaked at 87.7% with an average of 42.4%.

Additional testwork designed to further reduce silica was undertaken on a composite sample from all five drill holes with a grade of 34.6%Fe, 41.2%SiO2, 2.9%Al2O3, 0.05%P and 0.38%S. The processing incorporated rougher magnetic separation, hydro-separation, cleaner magnetic separation, regrind and re-clean by magnetic separation, rougher reverse flotation, regrind and cleaner reverse flotation and a final magnetic separation. This achieved a product concentrate grade of 62.6% Fe and 10.3%SiO2. These results were interpreted to indicate that the product achieved from the sample provided would not meet normal blast furnace feed requirements.

Mount Oscar – Stage 1 Drilling DTR Results – Units C and D

 

To investigate the reasons for the poor removal of SiO2 during this testwork programme, Apollo Minerals commissioned a quantitative mineralogical study on concentrates processed at two stages through the testwork. Testwork using QEMSCAN identified magnetite in two forms – as fine grained and ultrafine grained particles. The ultrafine magnetite formed intergrown structures with finely

disseminated quartz, classified as magnetite-quartz intergrowths, in which the components had grain sizes of less than 0.5 microns. The consulting group considered that liberation of the finely disseminated quartz from the magnetite-quartz intergrowths probably cannot be achieved in an economically-viable manner.

Additional DTR work was then commissioned with Apollo Minerals current processing consultants with the aim of achieving a maximum 7.5%SiO2 content in final concentrate. Tests to date have not achieved this target, with SiO2 levels still exceeding 13% even at P80 25 microns, considered very fine grained in the industry.

The consultant has, however, indicated that it believes that silica levels should be reduced by reverse flotation but with a potential substantial reduction on the Fe yield such that a mass yield from original feed to product of only 28% might be expected.

The consultant has also noted that Apollo Minerals Mount Oscar material (Units C and D) is very similar to other samples from the Cleaverville Formation including material from the Cape Lambert deposit and the adjacent Mount Oscar deposit. Testwork on similar material from other sources has successfully achieved an 8%SiO2 content in the finished product with an Fe yield of 75% of the Fe contained in the magnetic concentrate.

Metallurgical Testwork Programme

Apollo Minerals’ November 2010 drilling programme tested a different magnetite-bearing horizon that extends beyond Apollo Minerals E47/1379 to the northwest into adjacent tenements where it has been more drilled and tested by another explorer. It has previously reported that the magnetite encountered in its drilling is amenable to conventional treatment to produce a saleable concentrate. Work conducted by another explorer on magnetite located immediately adjacent to and along strike from Apollo Minerals ground produced a concentrate of 63% Fe and 7.5% SiO2. Apollo Minerals is confident that the ongoing testwork on samples from this drilling programme will produce similar results to those achieved by that group.

Further work on samples from Unit C (and D) has also been recommended Discussions with the Company’s consultants have indicated that this additional work should include reverse flotation tests, with the expectation of improving on previous results, and trials using High Pressure Rolling to determine whether superior liberation of magnetite from quartz can be achieved using this equipment.

The consultant considers that there is potential to produce a saleable product from Unit C (and D) material, even at 12% SiO2 because the material has unusually low levels of other deleterious components (Al2O3 and P).