Iron Road Limited (ASX:IRD) Approval And Imminent Commencement Of Stage V Drilling At Central Eyre Iron Project, South Australia

Perth, Aug 3, 2010 AEST (ABN Newswire) - Iron Road Limited (ASX:IRD) is pleased to announce the imminent commencement of a major exploratory drilling programme at the Company's wholly owned Central Eyre Iron Project (CEIP).

An exploration target for this programme at Murphy South of 400-800Mt at 17-20% Fe* has been estimated. The commencement of works follows approval of the programme by the Primary Industries and Resources South Australia (PIRSA).

Iron Road Managing Director, Mr Andrew Stocks, said that the programme continued the significant amount of project development work underway at Iron Road.

"This is our third substantial drilling programme for the year at the CEIP and with the prefeasibility study well underway, supports the rapid development of the Central Eyre Iron Project," he said.

"As part of this, we continue to make significant progress towards the completion of a prefeasibility study in early 2011. I look forward to the results and shareholder value that will be delivered as we continue to drive this development forward."

The drilling programme planned at Murphy South is a direct consequence of the current Stage IV drilling programme, which was specifically designed to test numerous high potential targets across EL3699.

A single traverse of eight drill holes at Murphy South, combined with Stage I drilling and geophysical inversion modelling, suggests that a large body of magnetite gneiss occurs in this area as a large overturned isoclinal fold, with a south southeast dipping axial plane. This has the effect of thickening the magnetite gneiss through duplication; which is highly desirable from a mining perspective.

It also appears that the geometry of geological structure (synform) has led to destructive interference (a cancelling) of the magnetic signal in the centre of the structure, resulting in an apparently weak or absent response despite drilling confirming that the magnetite gneiss occurs relatively close to the surface in this area.

Inversion modelling of the magnetic data has proven to be a reliable tool at the CEIP and a good correlation between the geology with the model results is evident along the recently completed drill traverse. Inversion modelling has been successfully used to aid in the planning of Stages II, III and IV drilling programmes and similarly applied in the design of all drilling traverses for the Stage V drilling programme.

From the inversion modelling and existing drill data at the Murphy South prospect (Stage I and IV), an exploration target of 400-800Mt at a grade of 17-20% Fe* is estimated for the area defined by the current proposed drilling programme. In addition it is likely that magnetite gneiss extends outside of this area, both east and west along strike.

The Stage V drilling programme comprises nine traverses with each traverse made up of seven to eight drill holes. Each hole is 100m apart and each traverse 200m apart. The total area to be covered is 700-800m wide (on apparent dip) and over 2000m long (on strike). All holes will be drilled on azimuths oriented true north at -60 degrees and maximum drill hole depths are anticipated to be in the order of 400-450m.

The drilling programme will be undertaken by Gomex Drilling for the RC component and Coughlan Drilling for the diamond drilling component. The programme will utilise one RC drill rig and three diamond drill rigs. When appropriate, all diamond drilling will move to a double shift basis to accelerate progress.

This drilling programme forms part of a planned strategy to establish a long-life +10Mtpa magnetite concentrate export operation. Test work from the Stage I, II and III drilling programmes indicates that a high quality concentrate may be produced from the Warramboo project area grading ~70% iron with low impurities. Metallurgical test work indicates excellent beneficiation characteristics with good potential for optimisation leading to a reduction in operating costs.

An existing JORC inferred mineral resource estimate report of 328Mt has been determined by Coffey Mining at the Boo-Loo and Dolphin prospects as well as an exploration target of between 2.8-5.7 billion tonnes magnetite gneiss for EL3699*.

* Refer to Competent Person's Statements on page 6 (refer to the link at the bottom of release).

For the complete Iron Road announcement including tables and figures, please refer to the following link:
http://www.abnnewswire.net/media/en/docs/63462-ASX-IRD-500388.pdf

Contact

Andrew Stocks Managing Director Iron Road Limited Tel: +61-8-9200-6020 Mob: +61-403-226-748 Email: astocks@ironroadlimited.com.au