IRON ORE - 230% increase at Centrex Bungalow JV project

Centrex Metals has announced a 230% increase at its Bungalow magnetite joint venture project in South Australia, after completing a 55,000 metre diamond and RC drill program. The new combined measured, indicated and inferred resource has been independently estimated at 338 million tonnes, a significant increase on the resource estimate of May 2011.

The project hosts the Bungalow and Minbrie deposits near Cowell on the Eyre Peninsula. Bungalow is a 70/30 joint venture between Centrex and Baotou Iron & Steel Group. It has estimated grades and mass recovery of an average grade of 29.6% iron head, 69.7% iron concentrate and 34.3% Davis Tube Recovery (DTR).

The Minbrie deposit is along strike of the Bungalow deposit, within the same banded iron formation. The drill focus to date has been on Bungalow, however nine holes have been completed at Minbrie resulting in an initial inferred mineral resource of 99 million tonnes. Further drill holes are planned to prove up the deposit and support the overall Bungalow project.

Centrex’s general manager of exploration Alistair Watts says one of the most significant advantages of the project is its proximity to capital city Adelaide and mining centre Whyalla. “The nearest town Cowell is 10km away and already has a mining connection with many residents employed at the Arrium Iron Duke mining complex.”

Consultants will now start work on pit optimization to form the basis of a pre-feasibility study (PFS) which will also include the recently completed geotechnical and groundwater modelling. The PFS remains on target for completion in late 2012.

Processing water for the project will be provided via a desalination plant at Port Spencer and a scoping study is under way to determine options for connecting the Bungalow magnetite project and Port Spencer to the proposed Eyre Peninsula electricity network upgrade.

Product from Bungalow will be taken to export markets via a deep water port facility at Port Spencer, which is nder development by Centrex and its joint venture partner Wuhan Iron & Steel Group (WISCO). This project involves building a 515 metre jetty and a ship loader with hourly capacity of 5000 tonnes.

www.centrexmetals.com.au