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By Rose Ragsdale
For Mining News 

Company targets big iron deposits, sands

With its Roche Bay iron project on fast track to development, aggressive explorer seeks iron, other minerals nearby and far afield

 

Last updated 9/25/2011 at Noon



While Advanced Explorations Inc. is focusing mainly on its two massive iron ore projects in Nunavut this summer, the aggressive exploration company is also continuing to explore promising West Melville Peninsula nickel and copper showings and to study an iron sands project it recently optioned in Alaska.

The Toronto-based junior plans to produce iron products initially from the C Zone, one of four zones on the 3,730-hectare (9,213 acres) Roche Bay property, which is located in one of the world's largest developing iron ore districts in eastern Nunavut.

The C zone at Roche Bay has an indicated resource of 323 million metric tons averaging 26.7 percent total iron (25.8 percent magnetic iron) and an inferred resource of 226 million metric tons averaging 25.8 percent total iron (23.8 percent magnetic iron), both at a 20 percent iron cut-off grade, representing only a small portion of the potential 140 kilometers (87 miles) of banded iron formation.

About 60 percent of the project's original 550 million metric tons of inferred resource was re-classified as "indicated" in April.

The iron formation encompasses not only the Roche Bay deposits, but also the company's Tuktu deposits and other targeted deposits in areas to the north, south and west of the Roche Bay Project.

Advanced Explorations said its primary objective in 2011 is to complete an open-pit mine feasibility study on Roche Bay examining a concentrate start-up operation of 5 million metric tons per year.

Exploration plans included potentially up to 7,500 meters of infill drilling and additional drilling along strike aimed at increasing the project's NI 43-101-compliant resource estimate to exceed 750 million metric tons. A drill program began in the third quarter of 2011.

A preliminary economic assessment for the C zone at Roche Bay indicates a potential US $1.1 billion net present value with a 24 percent internal rate of return and the potential for rapid advancement into development of either iron concentrate or high-value iron nugget products. Roche Bay also hosts additional resources in zones A, B and D that could support a 50-year mine life. The ongoing feasibility study is examining a concentrate start-up operation of 5 million metric tons per year.

In addition to resource and geotechnical drill programs this summer, the company said it also initiated a number of metallurgical studies looking to optimize concentrate process and quality at Roche Bay while reducing associated operating and capital costs. To date there have been five independent metallurgical studies undertaken (two in Canada, two in Germany and one in China) which support previously reported results that a high-quality concentrate can be produced.

The company said it expects to provide a further update on the project's C- Zone resource as part of this ongoing work with the intention of expanding the resource base in the feasibility study.

Promising assays at Tuktu

Advanced Explorations is also exploring its Tuktu Project comprised of 11 claims covering about 22,000 hectares (54,340 acres) of previously unexplored land some 60 kilometers (37 miles) north of Roche Bay.

Work at Tuktu, beginning in April 2011, included up to 3,000 meters in a phase 1 drill campaign designed to reveal a potential iron ore resource comparable to Roche Bay. Preliminary assay results from the project returned very long intersections of 32-33 percent iron, with some results showing a high-grade lens that grades greater than 50 percent iron.

The company Aug. 30 reported intercepting 8 meters of high-quality banded iron formation in drill hole 11TT011 grading 50.27 percent iron within a broader 165.25-meter interval of banded iron formation grading 33.61 percent iron.

The same broad interval also included 14 meters of 46.34 percent iron.

Drill hole 11TT011 was collared about 125 meters ahead of drill-hole 11TT010, which intersected 237meters of 33 percent iron) and drilled on the same section at the same azimuth and dip.

Together the holes have intersected the footwall and hanging wall contacts of the banded iron formation and results indicate that the width of the section is just over 300 meters carrying a grade of over 33 percent iron.

The depth of the section has not been established.

The proximity of Tuktu to Roche Bay and the deposit's exceptional iron results enhance prospects for the project becoming a satellite operation leveraged from the proposed Roche Bay infrastructure. The company anticipates initiating a NI 43-101-compliant resource study for the Tuktu project once all detailed mapping has been completed and all drill assay results have been received.

"We are excited by the consistent high grade, plus 50 percent iron, banded iron formation being intersected at Tuktu 1," said Advanced Explorations President and CEO John Gingerich. "The broad intervals of greater than 33 percent iron define an exceptional magnetite-rich BIF deposit. Tuktu is emerging as an important asset adding value to the business development scenarios of the region."

Alaska exploration project

In May Advanced Explorations reported undertaking an airborne magnetic survey of its Alaska iron sands project designed to better define the size, shape and distribution of magnetite-bearing sands in a placer deposit located both onshore and offshore near the Alaska village of Port Heiden about 700 kilometers (434 miles) southwest of Anchorage. The property also is situated on the west coast of the United States about 5,645 kilometers (3,500 nautical miles) from Shanghai, China and 5,107 kilometers (3,166 miles) from Japan.

Under an option agreement with Alaska-based 7th Sea Holding Company LLC, Advanced Explorations is required to undertake work commitments of US$2.0 million and cash and/or stock payments of US$ 1.6 million over a 15-month period. The claims are subject to a 3 percent net smelter returns royalty with an option for the junior to purchase up to 1.75 percent of the royalty.

7th Sea Holding worked to develop magnetite ore deposits near Port Heiden for a number of years before optioning the claims to Advanced Explorations. Since 2004, the company had acquired 34 miles of claims and private properties on the Alaska Peninsula and in the Cape Constantine area to the northwest.

7th Sea said the Port Heiden area contains a world-class undeveloped magnetite resource. In multiple groups of deposits, the company said controlled more than 8 billion metric tons of resource and 3 billion-plus metric tons of explored probable reserves. The company also said the deposits have an average raw iron ore grade of 58 percent.

In addition, Port Heiden has natural tidewater that can accept ocean-going ore barges with an average 150-day-per-year shipping window.

The airborne survey was to be flown over 1,322 line kilometers, including 1,162 line kilometers of survey line and 160 line kilometers of tie lines. The survey lines were flown perpendicular to the coast spaced at 250-meter intervals and the tie lines at 2,000-meter intervals.

Denver-based EDCON-PRJ was contracted to manage the data acquisition and interpretation. Geophysicist John Seibert was on site and conducted the surveying. Now based in Alaska, Seibert is a former vice president of EDCON-PRJ and has more than 35 years of world-wide magnetic data acquisition and aviation experience, the company said.

Advanced Explorations also collected a composite sands sample during an initial site visit that returned 8.23 percent Fe2O3, which the company said compares favorably to other iron sands projects. The company also said it hopes to extract commercial quantities of titanium from the iron sands.

Gingerich said the airborne survey was a rapid and cost-effective way to map the distribution and thickness of the magnetite-bearing sands, which is data that will be used to guide follow-up exploration as the junior further defines the attributes of the deposit.

"We believe the project's ocean location and proximity to China provide significant economic development advantages," Gingerich said Aug. 10.

Iron sands deposits typically are relatively low-cost mining ventures because the can potentially be mine using a simple dredging operation on land and sea.

Advanced Explorations, however, delayed work on the Alaska project this summer to focus on the feasibility study for Roche Bay and increased exploration in the West Melville Peninsula area.

The company said it anticipates starting a work program with a systematic sampling and drill (auger holes) program to better characterize (tonnage and grade potential) of the resource on the Alaska property early in the fourth quarter.

Strategic JV finalized

During the first half of 2011, Advanced Explorations spent more than C$1.9 million on exploration and development activities, including geotechnical and environmental baseline studies, at Roche Bay; C$3.1 million on exploration at Tuktu and C$159, 235 on exploration in Alaska. Additional expenditures were planned for the latter half of the calendar year.

Advanced Explorations also planned to collaborate with representatives of Chinese state-owned XinXing Pipes Group Co. Ltd., during their visit to Canada in September on finalizing a strategic joint venture agreement the companies initiated in July 2010. Shareholders and the Toronto Stock Exchange approved the JV agreement with the Chinese mining and manufacturing conglomerate earlier this year. XXP acquired an initial 15.5 percent of the junior's issued and outstanding stock for gross proceeds of C$5.3 million and gained a seat on Advanced Explorations' board of directors. Advanced Explorations has said the JV will enable the partners to jointly Roche Bay.

 

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