Mount Oscar Iron Ore Project (Western Australia)
Overview and Exploration
Background
Apollo has an 100% interest in the exploration rights of tenements EL 47/1378 and EL 47/1379, which cover an area of 212 km˛ and are located within the West Pilbara region of Western Australia. A significant portion of the important newly discovered Global Mount Oscar Iron Ore Project lies within tenement EL 47/1379. The balance of the Project is held by Fox Resources.
Location
Apollo's tenements lie within the Cleaverville geological formation. This geological formation also hosts the Cape Lambert magnetite project which is located about 25 km north of Mount Oscar. The Cape Lambert project contains a JORC compliant resource of 1.56 billion tonnes grading 31.2% Fe and was sold to the China Metallurgical Group Corporation for $400 million in July 2008.
Apollo's tenements are well located, close to existing road, rail and port infrastructure and towns. Importantly the Robe River railway line crosses EL 47/1379. Under recent proposals announced by the Western Australian government, Apollo would have access to this railway line which would provide direct transportation to the port facilities at Cape Lambert, located 30 km north of Mount Oscar. Additionally the North West Highway crosses EL 47/1378 and a number of major regional centres such as Karratha and Roebourne are close by.
Mount Oscar Project Location Map
Recent Developments in Exploration
Initial Drilling Programme
An intial drilling programme was carried out in late 2009, designed to target the highest magnetic amplitudes as modelled by independent geophysical consultants of high resolution airborne magnetic data flown over the Mt Oscar project area. The drilling comprised five reverse circulation (RC) holes drilled on four approximately 200 metre-spaced sections, for a combined length of 1,440 metres. Downhole intercepts of magnetite mineralisation ranging from 16 to 168 metres having iron grades ranging from 31.9% to 36.9% have been encountered within the two principal horizons. The average iron grade for the intercepts reported 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 271 metres @ 34.8% iron and 192 metres @ 35.9% iron were returned from 14 metres in hole OSRC004 and 25 metres in hole OSRC001 respectively. Several individual composite assays exceeded 40% iron with the highest being 43.8% iron returned from the composite sample comprising between 74m and 79m down hole OSRC004. A total of 152 five metre composite samples have been submitted to an independent laboratory for further magnetite-specific metallurgical testwork including Davis Tube Recovery or DTR analysis. This work is being undertaken under the supervision of an independent specialist metallurgical consulting group.
Magnetic Modelling
In April 2009, independent consultants Southern Geoscience completed a geophysical interpretation of the Global Mount Oscar Project Area (the Apollo and Fox Resources tenements combined). Twenty six forward magnetic models and one 3D inversion model were generated from airborne magnetic data to obtain estimates for the volume/tonnage of the highly magnetic banded iron formation (“BIF”) in the Global Mount Oscar Project Area.
It was determined from this that the Global Mount Oscar Project Area down to the first 250 metres of vertical depth from surface is estimated to contain 800 million tonnes of iron ore. This estimate is considered possibly accurate to +/- 25%, however it should be considered accurate to +/- 50% for planning purposes, and to be broadly indicative at best. Previously announced drill results from Fox Resources were utilised to confirm the accuracy of the model.
Southern Geoscience believe that, overall, the comprehensive modelling has provided a reasonably good indication of the total volume for the significant BIF sequence at Mt Oscar
The higher areas of magnetic resonance on the Apollo tenement are shown circled in the image below and indicate the potential targets for higher grade ore. In order to test the accuracy of the modelled results, Apollo will implement a drilling programme comprising four drill holes for 680 metres, commencing August 2009.
White areas delineate higher intensity magnetic resonance
Field Work and Surveys
Apollo has completed a low level airborne magnetic and radiometric survey over the tenements, carried out preliminary mapping work and undertaken an analysis of rock chip samples collected from Apollo's portion of the project area. Apollo is very encouraged by the results of the airborne survey, the preliminary mapping and the analysis of the rock chips which returned grades of up to 51.9% Fe.
Magnetic Survey
A low level survey was carried out at 50 metre line spacing over the Mt Oscar area and 100 metre line spacing over other parts of Apollo's tenements. The survey confirmed the presence of a substantial portion of the highly magnetic Mount Oscar Project area within EL 47/1379. The magnetic high indicates a significant banded iron formation (BIF). The survey also outlined two additional magnetic anomalies within EL 47/1378, which is largely soil-covered. These newly discovered magnetic highs could represent either iron-rich bodies similar to Mount Oscar, or discrete ultramafic sills, similar to the nearby Radio Hill and Sherlock Bay, both of which contain significant nickel sulphide deposits.
Sampling and Mapping
The analysis of a small number of rock chip samples collected from the project area is also very positive, with the samples returning up to 51.9% Fe.
Preliminary mapping showed that over 6km of the magnetite-rich horizons are outcropping at EL 47/1379, which represents approximately 35% to 40% of all outcropping magnetite-rich horizons present at Mount Oscar.
