A significant new iron ore exploration venture targeting substantial channel iron deposits in Western Australia"s East Pilbara region has been unveiled following a three-way agreement to combine the iron ore assets of diversified resources company, Consolidated Minerals Limited, and Alkane Exploration Ltd into a newly established iron ore company, BC Iron Limited. BC Iron has launched a $6 million Initial Public Offering (IPO).

BC Iron has the right to earn 100% interest in the Nullagine Project in West Australia's East Pilbara, formed by merging the adjacent tenement packages held by Consolidated and Alkane. The combined tenements cover some 1500sqkm and include the Bonnie Creek, Nullagine River, and Shaw River palaeo-channels, which represent prime exploration targets for Channel Iron Deposits (CID's). It is anticipated that Consolidated will hold a 28% interest in BC Iron on listing, while Alkane will have a 17% stake.

CID deposits in the Pilbara region, such as the world-class Yandicoogina deposit, account for some 7.8 billion tonnes of iron ore resources, but historically have contributed only around 20% of production from the region. However, production from CID's is increasing with the record levels of demand for iron ore globally and particularly from the rapidly growing Chinese economy.

The Nullagine Project comprises a number of Tertiary-aged palaeo-channel systems extending over a cumulative length of 90km. Based on detailed mapping and limited stratigrapic drilling, the Bonnie Creek palaeo-channel represents an exploration target of between 200 and 600 million tonnes of iron-rich pisolitic channel deposit. Surface sampling of the Bonnie Creek channel returned iron grades of up to 59% iron.

The project area is some 200km south-east of Port Hedland and 100km north of Newman, strategically located approximately 50-100km east of the existing BHP-Billiton railway line and 20-30km north of the proposed operations and infrastructure being developed by Fortescue Metals Group Ltd at Christmas Creek and Cloud Break. The railway line proposed by FMG traverses the westernmost of the Nullagine Project tenements.

BC Iron's newly appointed managing director, Mike Young says the strategic consolidation of the tenements held by Consolidated Minerals and Alkane provides a significant opportunity to build an important new iron ore exploration and development project in the East Pilbara region of Western Australia.

"With the continuing record levels of demand for iron ore globally, there is a significant opportunity to develop new supply sources," Mike Young says.

"Channel Iron Deposits, because of their geological characteristics and genesis, represent very large exploration targets with the potential to host sizeable tonnages of iron mineralization."

"The strategic location of these tenements in the East Pilbara will enable BC Iron to pursue a coordinated and focused exploration strategy to develop substantial iron ore resources proximal to existing and developing infrastructure in the East Pilbara region," he says.

"Our IPO and ASX listing will underpin an aggressive exploration strategy targeting numerous walk-up drilling targets."