Australian-based ferro-alloys company Precious Metals Australia Limited has laid the foundations for a significant upgrade to the existing ore reserve at its 90%-owned Windimurra Vanadium Project in Western Australia after a successful drilling program which delineated significant extensions to the mineralisation.

Significantly, the drilling program was successful in its core objectives of increasing the mineable width of the Windimurra orebody and extending the mineralisation down-dip and below the current resource envelope. The results are expected to underpin a potentially significant increase in the Windimurra ore reserve - already the world's largest proven ore reserve of Vanadium - and enhance the economics of the forthcoming $200 million Windimurra mine development.

The 2426 metre Reverse Circulation (RC) drilling program - which was designed to target deeper, fresh mineralisation in the hanging wall of the substantial Windimurra ore body - had intersected vanadium, iron and titanium mineralisation west (parallel to) and down-dip of the previously delineated ore zone, increasing the mineable width of the ore body. All of the newly intersected mineralisation is outside the current resource and reserve envelopes and remains open down-dip and along strike.

The drilling returned consistent vanadium pentoxide grades of up to 0.53% V2O5 with iron and titanium grades of up to 39.4% Fe and 18.4% TiO2. Indicative intersections outside of the current reserve included 26 metres @ 0.41% V2O5, 25.2% Fe and 8.3% TiO2 in a hole which returned a total of 40 metres of mineralised intercepts and 29 metres @ 0.39% V2O5, 22.9% Fe and 7.5% TiO2 in a hole which returned a total of 38 metres of mineralised intercepts.

A 10-20 metre thick vanadiferous titano-magnetite bedrock horizon intercepted in the program contains higher average iron and titanium than the main Windimurra mineralised horizon. Mineralisation from this zone, which overlays waste above the main Windimurra vanadium deposit, is being tested to establish the potential for economic iron and titanium recovery.

Hanging wall waste, using a cut-off of 0.275% V2O5, recorded greater than 10% TiO2 and 20-30% Fe for most intervals drilled, indicating the project's potential to deliver further economic benefits beyond those of the planned dedicated vanadium operation.

PMA managing director Roderick Smith says the results of the drilling were very pleasing, underpinning a full reinterpretation of the Windimurra geological model and significantly enhancing the project. "Preliminary pit modelling has indicated that mining of almost all of the current resource of 148 million tonnes at 0.46% vanadium would be economic," he says.

"Further detailed work is required before the resource can be re-classified as a reserve, however we are very confident that this work will result in a significant upgrade to the current Ore Reserve of 56 million tonnes at a 0.46% vanadium pentoxide," Roderick Smith says.

"The new model will be used for pit optimisation and mine planning studies before production restarting early next year."

"Significantly, we expect that this will result in a wider, shorter, deeper pit configuration, reducing mining costs and increasing the ore grade and magnetic recovery of the magnetite, which will significantly enhance the economics of the operation," he says.

First production at Windimurra is targeted for early 2008. When operating at full capacity, the mine is expected to supply approximately 8% of the world's total vanadium output.