Release: Coziron Resources reports W. Sumatra mining activities

(31 July 2007) -- ASX-listed miner Coziron Resources Limited announced quarterly report ended 30 June 2007

 

Project Review

 

Rawang Gadang Iron Ore Project

Metallurgical test work was completed in the March quarter and results were made available to ASX early in the reporting period. Seven representative core samples were collected for Davis Tube Recovery (“DTR”) test work and submitted to Ultra Trace Laboratories in Canning Vale, Perth.

Significant conclusions deducted from test work include:

▪ “Iron Ore average concentrate grade is more than Fe69%.”

▪ “The magnetite exhibits high weight recovery giving concentrate qualities significantly better than most Australian magnetites; with a mass recovery average of greater than 73%.”

▪ “Weight recovery is almost double that of Australian magnetite ores therefore requiring less ore to provide the same volume of concentrate.”

▪ “SiOB2 is considered as an impurity and after DTR test work SiO2 content is significantly reduced; achieving on average a 70% reduction.”

▪ “Al2O3, MgO and P are all within acceptable Direct Shipping Ore (DSO) limits; levels of MgO can be considered an additional benefit during blast furnace techniques and is considered a ‘self fluxing’ ore.

▪ “An iron ore product of this quality, with higher concentrate, can achieve premium prices.”

 

A comparison of DTR concentrate grades and head grades of each metallurgical sample is detailed in the March Quarter. Given the exceptional recoveries the process of producing such high grade concentrates can therefore be achieved at a reduced operating and capital cost.

 

These results are a significant step in defining a potential small to medium sized high grade magnetite deposit and is in line with the Company’s goal to bring the project to production as soon as practical to enable early cash flow and value to shareholders.

 

A Ground Magnetic Survey was proposed during the quarter and PT Elliot Geophysics Indonesia (‘Elliots’) were commissioned and commenced works in July 2007. Two Geometric G856 PPM Magnetometres will be in operation and the scope of work encompasses an area of 1,000 x 800 metres, with survey specifications of 50 metre line spacings with magnetic responses recorded every 5 metres along survey lines. Approximately 16 line kilometres is proposed for the program which is designed to delineate further extensions of high grade magnetite which are currently open in a north-west and southeast direction.

 

Results will be made available as soon as practical.

 

Kunyit Iron Ore Project

The drilling program at Kunyit was warranted to test the magnetite and hematite mineralisation at depth and to determine lateral extensions. A total of 14 holes were drilled at Kunyit for a total of 943.6m. The total included 832.95m of PQ core and 110.65m of HQ core.

 

The drilling was carried out by PT Maxidrill Indonesia, whom supplied a Maxi 195 man-portable diamond rig set up for PQ and HQ diamond coring. The holes were down-hole surveyed using an Eastman single shot camera.

 

Core was sent to PT Intertek Utama Services in Padang for sample preparation. The sample preparation scheme consisted of jaw-crushing to nominal 20mm, total pulverization in a LM2 or LM5 ring-mill to passing 200# and riffle splitting of a nominal 250g pulp sample for analysis. Samples were sent from the sample preparation facility in Padang to Ultratrace Laboratories Pty Ltd in Australia for analysis. Al2O3, CaO, Cr2O3, FeTotal, K2O, LOI, MgO, MnO, Na2O, P2O5,SiO2, TiO2 and V205 were analysed by XRF. Detection limits for all elements were 0.01%, LIO to 0.1%.

 

The drilling program successfully tested the main prospect areas of Bukit 1 and Bukit 2 with broad zones of iron-manganese mineralization intersected in a number of the drill-holes. At Bukit 3, three holes tested small quartz-FeO veins with only one hole intersecting low grade iron mineralization near the surface.

 

Iron mineralization at Bukit 1 and 2 has been established to extend over economic widths and reaches economic grades in individual samples; however the overall grade of the deposit is unlikely to be economic. Mineralised intersections can be typified as ferruginous or manganiferous clays with thin discontinuous veins of more massive magnetite, goethite or hematite. The single drill-hole at Bukit 1 failed to intersect economic grades of FeO; a broad zone of weathered, ferruginised calc-silicate skarn was intersected, which peaked at 53% Fe (Total). At Bukit 2 a sheet of iron-manganese mineralisation was defined with 10 drill-holes. While 17.5m of economic grade mineralisation was intercepted in KYT007, the remaining holes only intercepted thin discontinuous Fe mineralisation and have effectively closed off the mineralisation in KYT007. The iron mineralisation to the north and east of KYT007 has been eroded away, while to the south and west it tapers out rapidly into a zone of manganiferous clays. This appears to be supported by the results of a ground magnetic survey carried out previously.

 

While many magnetite deposits are amenable to some form of beneficiation, this is unlikely to be successful at Kunyit as ferruginous-manganiferous clays appear to form a substantial part of the alreadysmall potential resource. Only in the Bukit 2 area from KYT007 to the iron oxide outcrop to the north is there any potential for an economic grade resource; tonnage potential is however small, with potential for approximately 40,000 tonnes of >55% Fe Ore.

 

The 3 holes drilled at Bukit 3 were targeted at a very narrow discontinuous Quartz-FeO vein well away from the main zone of alteration and veining, and failed to intersect economic mineralisation.

 

The Kunyit area does not appear to host a large enough iron ore resource to warrant a small scale mining operation for Coziron. Sufficient resources may be present in the KYT007 area to permit very small scale mining by an Indonesian company or cooperative and Coziron will look at options to maximise potential on-sale opportunities of the Kunyit project.

 

Lubuk Gadang Lead Zinc Project

No field work was carried out at the Lubuk Project during the period.

 

Inderapura Coal Project Area

Granges’ legal due diligence was completed at the start of the reporting period, and a field trip commenced towards the end of the quarter which forms the technical due diligence. The field trip incorporated a three week program of geological mapping of coal seams, particularly in and around Block A and B prospect areas, where several large pits (up to 300m long) have in recent times been excavated for mining.

 

Grange collected several grab samples for analysis which have been submitted to SGS in Queensland. Grange will provide a comprehensive field report once results have been returned and at which point they will make a decision to enter into Joint Venture agreement. A survey team was commissioned during the quarter and ten bench marks were emplaced to assist with detailed geological mapping and pit surveys. ‘Crest and toe’ survey stations for each pit were recorded and details of the survey will be combined with the detailed geological mapping from Grange’s site inspections.

 

Further exploration activity will be proposed once final reports have been received from Grange and from the survey program. An application for an expansion in tenure covering the Inderapura Coal Project area was applied for in the previous quarter. Additional ground outside of the initial 4 tenement blocks became available, and it was a logical step for the company to expand on the ground holding, potentially increasing resource tonnages. Extensions to three of the blocks have been granted during the quarter; namely Inderapura (KW05191BBI),Tapan (KW05199BBT), Tapan (KW05192BBT), which now form a contiguous block. The forth tenement, Lunang (KW05193BBT); is awaiting its granted status, which should be available in the coming weeks.

 

Singkarak Copper-Gold Project

Coziron is pleased to report that it has successfully completed due diligence on the Singkarak Copper- Gold Project and all conditions covering the due diligence have been satisfied including legal and associated site inspections.

An extension to the due diligence period was granted earlier in the quarter and was duly appointed reflecting new applications by the Indonesian Partners to increase the tenement holding over the Singkarak project area.

The applications were granted on 5 April 2007, and changes are significantly beneficial with extensions encompassing further known outcrops of low and high sulphidation copper-gold showings and porphyry copper. A tenement location map can be found in the March quarterly report.

Coziron is currently in negotiations to formalise a Joint Venture (JV) with the Indonesian Partners, and will in due course announce details of the agreement once completed. The signing of a JV into the Singkarak copper-gold project in Sumatra will be an important and strategic development for the Company. Coziron believes the project area is highly prospective and that there is significant potential to delineate a sizeable resource.

 

Immediate follow up work is warranted once a JV agreement has been executed, and will include soil sampling, auger sampling, ground magnetics, electro-magnetic (EM). (end of release)