The Company now has a total of 15 iron ore tenements covering 1,588km2 that are located within the Yilgarn Iron Ore Province (“Yilgarn IOP”) in Western Australia, of which nine tenements are granted and six tenements are pending applications.  The Yilgarn IOP is considered highly prospective, given its history of large-scale iron ore production, with the Cliffs Natural Resources-owned Koolyanobbing operation (formerly operated by Portman Limited) currently producing at a rate of approximately 8Mtpa of Direct Shipping Ore (“DSO”).  The Yilgarn IOP is increasingly being recognised as an attractive location for the development of iron ore, given its proximity to rail and access to ports.

The YIOP tenements have been divided into logical infrastructure hubs:

Hub

Project

Tenement

Status

Area (km2)

Perinvale South

Walling Rock

E30/414

Granted

93

Perinvale South

Perinvale South

E30/415

Granted

93

Perinvale South

Extension

P30/1084

Granted

1

Perinvale South

 

E29/0843

Pending

210

Perinvale South

 

E30/0434

Pending

126

Perinvale South

 

E30/0435

Pending

207

Perinvale South

 

E30/0439

Pending

156

Perinvale South

 

E30/0440

Pending

54

Perinvale South

 

E30/0441

Pending

210

 

 

 

 

 

Perinvale North

Perinvale North

E57/818

Granted

120

 

 

 

 

 

Windarling

Windarling West

E77/1820

Granted

12

Windarling

Windarling East

E77/1737

Granted

42

 

 

 

 

 

Diemals

Diemals North

E77/1749

Granted

111

Diemals

Far East

E77/1757

Granted

114

Diemals

Johnson North

E77/1758

Granted

39

 

As part of a new iron ore strategy, on February 23, 2011 CIO announced that three of its applications for exploration licences that are prospective for the occurrence of iron ore in Western Australia had been successfully granted.

The Company believes its greater YIOP tenement package provides a significant platform for the exploration for iron ore and will provide a significant, new future phase of growth for the Company.

On the June 22, 2011, CIO announced that it has entered into a farm-in agreement with the Australian Stock Exchange listed Pacific Ore Limited (“Pacific”) for CIO’s Perinvale North Iron Ore Hub for AUD$15million. The Perinvale North Iron Ore Hub consists of Exploration Licence E57/818 covering an area of 120km² and is located approximately 550km North East of Perth, Western Australia in the YIOP.

The farm-in agreement provides for Pacific to farm-in into a joint venture with CIO on the following terms:

  • Earn 51% by spending $1.5 million within 2 years.
  • Earn an additional 19% by spending a further $3.5 million within 3.5 years.
  • Earn an additional 20% by spending a further $10 million within 5 years.

CIO may elect to maintain its interest at each stage of the farm-in once Pacific has earned a 51% interest.

The initial strategy and objective of the Company is to evaluate the occurrence of both magnetite ore and direct shipping ore within the above tenements to gain an initial understanding of their respective resource potential.

 

Perinvale South Iron Ore Hub

Exploration Target (Walling Rock Project - E30/414)

3D and 2D magnetic modelling of recently flown helimagnetic survey data over CIO’s 100% owned Walling Rock Project has indicated a potential exploration target estimate of between 510Mt to 850Mt (with a 25% range).  Of this 30Mt to 75Mt is potentially enriched near surface mineralisation above the primary bedrock mineralisation.

The exploration target for primary BIF and potential near surface enriched material has been estimated based on a number of assumptions and limitations which include, among other things: 

  • The strike length of the modelled magnetic anomalies represents ore grade BIF mineralisation.
  • The geometry of the magnetic sources remain constant over their entire length.
  • The model depth extent has been fixed to 200m.
    The thickness of the potential enriched near surface material has been calculated as the difference between ground level as defined by the aeromagnetic survey DTM and the depth to the top of the model at the model centre, capped at 25m where required. No correction or adjustment has been made for variations between the ground level and the top of the model along strike.
  • 100% recovery and no dilution.
  • The specific gravity of the BIF and enriched material is 3.2t/m3.

It does not take into account the depth to top or effect of dip of the models and how this may impact potential mining viability.

 

Regolith Mapping and rock chip sampling (Walling Rock Project - E30/414)

Detailed regolith mapping and rock-chip sampling has been completed.  A total of 16 rock chip samples were taken during the mapping (8 regolith samples and 8 BIF samples) with a peak iron grade of 37.93 % Fe.  The mapping confirmed the occurrence of banded iron formation (BIF) with true thickness of up to 100m. The sampling also confirmed the presence of BIF enriched in Fe by surficial weathering processes.  Areas for future sampling programs have been identified.

 

Airborne Magnetic Survey (Walling Rock Project - E30/414)

A low-level high resolution airborne magnetic survey was conducted over the central and eastern part of the Walling Rock project in the Perinvale South Iron Ore hub.  The survey involved 917 line-kilometres of flying with lines spaces at 100m.  The data has been processed and reviewed by an independent geophysical company.

 

Detailed Mapping Sampling Program (Walling Rock Project - E30/414)

A targeted sampling program was undertaken in December 2011 by Strategic Resource Management Ltd.  The program focused on sampling across the exposed BIF ridges.  Coarse grained magnetite was exposed at surface and the BIF ridges were mapped along strike for 8km and up to 110m thick.  A total of 37 rock chip samples were collected with assay results ranging from a peak value of 43.11% Fe to 30.18% Fe.

 

Flora Survey (Walling Rock Project - E30/414)

A Level 1 flora and fauna study was recently completed by Umwelt (Australia) Pty Ltd.  The survey was designed to identify records or any potential occurrence of conservation significant flora and fauna.  A desk top study and an infield survey were completed in early February, 2012. The results of the study and survey were that:

  • No conservation-significant flora was identified within the proposed drilling area.
  • It is highly unlikely any future exploration activity will impact on species identified by the desktop review.

 

Yilgarn Iron Ore Project Location Perinvale South Iron Ore Hub Tenement Location

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