Mount Ida Magnetite Project


Jupiter Mines has defined an Inferred Resource over the Central Zone of the Mount Ida Magnetite Project of 1.85 billion tonnes with a head grade (15% Fe cut-off) of 29.48% Fe, 45.88% SiO
2, 1.10% Al2O3, 0.074% P, 0.201% S (ASX announcement 8/1/2013). DTR analyses indicate the following grades; 64.20% Fe, 5.61% SiO2, 0.054% Al2O3, 0.013% P, 0.161% S. This estimate is based on drill programmes totalling approximately 11,900m completed between 2008 and 2010.

Geology

The banded iron formation (BIF) magnetite mineralisation in the Central Zone is approximately 3km long and over 1.5km wide. A total of 465 holes, comprising 99,308 drill metres, have been drilled in the Central Zone region since 2008. The drill hole coverage in the defined resource area is on a nominal spacing of 100m x 100m. During the 2011/2012 year, Mount Ida's infill drill programme was completed over the Central Zone. It comprised of 202 RC and diamond drill holes, for a total of 67m357 meres. A total of 327 RC holes (75,521m) and 20 diamond core holes (5,958m) were used to prepare resource estimates.

 

Mount Ida Drill Hole Location Plan

Mount Ida Drill Hole Location Plan

The magnetite BIF units in the Central Mount Ida zone plunge at approximately 20 degrees to the NNE and dip 30-40 degrees to the ENE. Drill data modelling has delineated some ten magnetite BIF lodes in the central area. The drilling has intersected several flat-lying and sub-parallel BIF units, with the deepest being approximately 340m below the surface.  The average unit thickness is approximately 40m, but in places intercepts exceeding 100 m have been encountered. Oxide mineralisation is generally present from surface to a depth of approximately 50 metres and is dominated by hematite, goethite and magnetite. The magnetite extends from within 50 metres of surface to 300 metres in vertical depth.

Jupiter also completed an additional 43 RC drill holes for a total of 12,646 meters, along a further 4kms of strike to test the continuity of the northern and southern extensions to the Mount Ida Central lodes. Geological modelling has commenced over these areas and resource modelling will be undertaken following the completion of the Mount Ida Central Zone resource re-estimate. This modelling enabled a maiden Inferred Resource estimate to be completed over an additional 4km strike length of the Mount Ida BIF.

Mineral Resources

On 19 January 2011 Jupiter Mines announced a Maiden Inferred magnetite resource at Central Mt Ida of 530 million tonnes at 31.94% Fe. The resource was generated from 11,898 metres of drilling conducted on the Central Area only.  The resource model of the Central Area shows six flat lying magnetite lodes.  The mineralisation is open to the north and south of the tested Central Area.  Further drill programs were therefore planned to increase the Inferred resource by exploring the Southern and Northern Areas, whilst advancing the Central Area to Measured and Indicated status.  The maiden resource generated for the Central Area confirmed a significant magnetite project at Mt Ida.

On 5th September 2012, Jupiter Mines Limited announced an increase of 132% to the JORC-compliant mineral resource at Mount Ida’s Central Zone to 1.23 billion tonnes (based on a 10% magnetic Fe block grade cut-off). 

Eighty six per cent is now in the indicated mineral resource category. The estimate was based solely on the Central Zone, and was likely to increase further when the results of r drilling on the Northern and Southern extensions at Mount Ida were modelled.

Subsequently on the 8th January 2013 Jupiter Mines Limited announced that the Northern and Southern Zones at its Mount Ida Magnetite Project in the Yilgarn region of Western Australia added a JORC compliant Inferred resource of 615 million tonnes at 28.86% Fe

With the existing Central Zone JORC compliant Indicated resource of 1.23 billion tonnes at 29.79% Fe, the total magnetite resource for the Project is now 1.85 billion tonnes at 29.48% Fe.

Process Plant Design

The process plant design was commenced as part of the feasibility study in Q1 2012, with scenario analysis and process optimisation.

The process flow sheet and layouts were finalised and the process plant capital estimation was well advanced by the end of Q2 2012.

Metallurgical test work

The metallurgical test work of the first phase of the high pressure grinding rolls (HPGR) testing was completed in Q2 2012 with the ore demonstrating a consistent response to the HPGR process, with significant size reduction at a low energy consumption being achieved. Phase 1.5 of the test work program was commenced in April 2012, and pilot plant test work was commenced during Q2 2012. All the test work programs for the Feasibility Study were completed during Q3 2012.

During Q3 2012 a diamond drilling program commenced to obtain PQ core samples for detailed pilot plant metallurgical test work. This program was completed in Q4 2012 and the samples are being stored until the test work is undertaken. .

Infrastructure

Potential infrastructure providers for gas lateral pipelines and/or gas fired power stations were identified with proposals sought in order to contribute to the feasibility study in Q1 2012. During Q2 2012 these providers were commissioned to undertake the key components of the Feasibility Study and commenced the work in Q3 2012.

A number of revisions were undertaken to optimize the general mine layout, waste dumps, tailings management facility, process plant and supporting infrastructure in Q1 2012 and this was finalised in Q2 2012.

Planning commenced in Q2 2012 on the regional groundwater exploration program.  During Q3 2012 work commenced with the identification of targets and planning for geophysical gravity surveys over those targets. Geophysical gravity surveys and planning for the drilling of these targets identified from the surveys was also undertaken in Q4 2012.

Mine planning

During Q3 2012 preliminary optimisation work was undertaken using conceptual costs, process recoveries and a mineralisation block model to determine a conceptual ultimate pit shell. Analysis of this shell has identified the potential for developing cutbacks to delay waste stripping whilst accessing the higher grade portions of the mineralisation sooner and maximising Net Present Value.

Site Layout

In Q3 2012 the mine layout, including a ROM pad, gyratory primary crusher, processing plant, waste rock landform, tailings management facility (2 cells) and supporting infrastructure was finalised. The supporting infrastructure includes a gas fired power station, concentrate rail load-out facility and rail loop, accommodation camp, sealed airstrip, gas lateral pipeline from the Goldfields Gas Pipeline, rail line from Menzies, desalination plant and mine access roads.

Mount Ida Site Infrastructure Layout

Mount Ida Site Infrastructure Layout

Geotechnical site investigations

Planning was commenced in Q2 2012 and completed in Q3 2012 to undertake the geotechnical sampling for the key infrastructure sites. In Q3 2012 Phase 1 of the geotechnical soil sampling was completed. This entailed the gathering of geotechnical data for the design of foundations for the process plant infrastructure.

Environmental and Project Permitting

After expenditure on the Mount Ida project ceased in November 2012, the main focus during the March 2013 quarter was the finalisation of reports, and closing out of baseline surveys and project impact assessment studies.

Baseline surveys and reports initiated prior to November 2012 have now been finalised with the information gathered for the Mount Ida project used to also assist in establishing a regional context for the environmental impact assessment of the Mount Mason project submissions.

No further studies have been initiated on the Mount Ida project.

Having completed the resource estimation for Mt Ida in 2012, planning, scheduling and quotation for an extensive drill hole rehabilitation program was undertaken during the March quarter.

This project requires the rehabilitation of over 320 drill hole sites and associated sumps, collection and disposal of bagged drill hole samples, and the rehabilitation of over 36 kilometres of tracks.

Approvals for the rehabilitation management strategy were sought from the DMP and DEC respectively with the program fully scoped, costed, contractors sourced, and contracts awarded.

Work commenced on the rehabilitation program in late March, and should be completed early in the September quarter.

Stakeholder Consultation

Consultation with key stakeholders is an ongoing requirement of the project approvals process.

Local landholders in particular are engaged on a regular basis with 3 pastoral stations potentially impacted by the Mt Ida and Mt Mason project footprints.

Aside from consulting the pastoral station leaseholders in regard to activities to be conducted on Jupiter tenements and station landholdings, and the potential timeframes for Mining Proposal submission and development, other stakeholders consulted during the March quarter included:

  • DMP – tenement application for haul road footprint, and Mt Ida drill hole rehabilitation program
  • SEWPaC –EPBC Referral meeting and presentation
  • Wutha and Wongatha Native Title claimant groups – completion of heritage assessments
  • Malleefowl Preservation Group Inc.– confirmation of sponsorship agreement to assist in ongoing Malleefowl research and management activities
  • Menzies Shire Council – Mt Ida / Mt Mason haul route options and road traffic assessment
  • Further consultation & project approvals presentations will occur with Federal, State and local government stakeholders during the second quarter.

Study Scope

On the 4 September 2012 an increased resource estimate for Mt Ida of 1.23 billion tonnes at 29.79þ was announced, indicating the potential for a robust, long-life operation, which would  underpin the Mount Ida Feasibility Study, which was due for completion by Q3 2013. The Studywas based on annual production of 10 million tonnes a year of beneficiated magnetite grading +68 per cent Fe.  It was also stated that all work streams on the Mount Ida feasibility study were due for completion by December 2012, with the feasibility study to be delivered by Q2 2013.

However, on November 8th 2012, Jupiter froze further expenditure on the Project, mainly due to the increasing cost environment indicated by the preliminary estimates of the Mount Ida Feasibility Study.  This identified higher capital and operating costs than those contained in the 2011 Scoping Study. In light of these estimates, taken together with the depressed iron ore prices and strong exchange rate environment at the time, the Jupiter Board concluded that itwass in the best interest of the Company and its shareholders to freeze expenditure on the project until market conditions improve and uncertainty in delivering key infrastructure to enable the export of magnetite concentrate is removed.

Recommencement will be subject to improving market conditions and a port solution being secured. The future viability and development prospects of Mount Ida remain dependent in part on the West Australian Government taking steps to ensure that a suitable Port and Rail solution is available in the Yilgarn region.

Nonetheless, the Mount Ida Magnetite Project now has a significant magnetite resource with the Feasibility Study components well advanced.

Jupiter has retained its ownership of the Mount Ida project and continues to meet its minimum expenditure obligations on the tenements with a view to protecting the value of the earlier work for potential future development.

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