Classification
SRK is of the opinion that it is appropriate to classify the resource in the inferred category as defined by CIM Guidelines in this case.
Initial Metallurgical Testwork
SRK supervised and reviewed a certain amount of metallurgical test work on samples collected from the Sheini deposit so as to determine whether or not the material has potential to be used to produce a saleable product and so enable it to report the above mineral resource estimate. SRK is satisfied that the iron mineralization has reasonable prospects for economic extraction as required by CIM guidelines.
Work Completed to Date
Initial metallurgical test work has been completed by SGS Mineral Services UK Limited ("SGS"), primarily at laboratories in the UK, and by Cardero Materials Testing Laboratory Ltd. ("CMTL"), located in USA (which is owned by the Company, and is therefore not an independent testing laboratory). Petrographic reports, QEMSCAN and X-Ray Diffraction work together suggest that the iron mineralisation at Sheini consists of very finely disseminated haematite within a silica matrix. Initial work has been completed on three samples to date (Table 2).
Table 2: Metallurgical Samples---------------------------------------------------------------------------- Interval Fe (%) Metallurgical Mat Lab HeadSample Type Drillhole (m) (ALS) Laboratory Grade (Fe %)----------------------------------------------------------------------------Primary Ironstone SCD-012 89.6 35.1 SGS 36.1----------------------------------------------------------------------------Detrital Iron SCD-049 & 050 27.2 n/a SGS 25.1----------------------------------------------------------------------------Primary Ironstone SCD-048 109 36.8 CMTL 36.9----------------------------------------------------------------------------
SGS Laboratories
SGS initially assessed a conventional gravity separation method, using a combination of gravity (heavy liquid or "HL") separation at coarser sizes together with magnetic separation at finer sizes. For the primary ironstone, this approach was largely unsuccessful. The detrital ore exhibited a greater potential for gravitational upgrading. The HL test work was conducted at a top size of 8 mm, and individual density fractions reported assays of up to 60% Fe for the size fractions above approximately 0.5 mm. Overall, the HL test results showed the potential to produce a concentrate assaying 56.6% Fe, albeit at a low Fe recovery.
CMTL
CMTL Smelting - A raw (non-upgraded) sample with a 36.7% iron head grade was prepared and smelted in a 50kW electric arc furnace. The purpose of the smelt test was to establish if the raw samples will be amenable to smelting and production of hot metal or pig iron. The test produced a pig iron grading 91.1% iron with a 73% yield and is a successful proof of concept. These are positive results for a single smelt test on raw, unbeneficiated material. Phosphorous content returned from this test was high but the Company anticipates reduction of phosphorous can be achieved during upgrade to concentrate or via post-smelting ladle treatment.
CMTL Beneficiation Roast - CMTL used a solid-state reduction to reduce fine-grained haematite to magnetite using only a coarse grind (-4mm +1mm) prior to roasting at less than 1000 degrees C in a rotary kiln. This process was successful and the internal forces exerted by the phase transformation from haematite to magnetite induced self-liberation of the magnetite from the silica. Following conventional low intensity magnetic separation ("LIMS") using a Davis Tube, the concentrate grade increased to 50% iron and the iron:silica ratio increased indicating that silica had been liberated and rejected.
