Iron Road Limited (ASX:IRD) Results from Stage 1 Exploration Drilling Programme at Gawler Iron Project

Perth, Sep 7, 2010 AEST (ABN Newswire) - Iron Road Limited (ASX:IRD) is pleased to announce the results from Stage I exploration activities at the Gawler Iron Project. The reconnaissance drilling programme comprised 71 reverse circulation (RC) drill holes for 6,101m.

Overview

The Gawler Iron Project is situated approximately 25 kilometres north of the Trans-Australian Railway and 200km southwest of Coober Pedy, along the western margin of the Gawler Craton in South Australia.

Iron Road Managing Director, Mr Andrew Stocks, said the results are very encouraging and warrant further exploration at Gawler.

"Our initial test work has shown that Gawler is host to a number of near surface magnetite deposits, capped with hematite rich zones. Most importantly, our first pass testing shows that this material can be readily processed to produce a concentrate that easily meets and exceeds expected iron ore market product specifications," said Mr Stocks.

"We are now continuing our evaluation of Gawler in Stage II. Further evaluation is needed, but our early concepts for Gawler envisage a possible series of mining pits, backed by a central processing hub to treat both the rich hematite cap and magnetite material."

The project area has not been systematically explored for iron ore despite reconnaissance drilling of surface outcrops in the area by the South Australian government in the 1960's, identifying several iron deposits. The gneiss-hosted deposits are attractive exploration targets due to the relatively coarse grain size of the magnetite (100-500 micrometres) when compared with more conventional BIF-hosted magnetite deposits. The magnetite mineralisation is overlain by a second style of hematite-rich mineralisation which is restricted to the near-surface weathering environment.

In 2009 Iron Road Limited conducted high-resolution aeromagnetic and ground gravity geophysical surveys that for the first time mapped the magnetite gneiss target rocks below the quaternary cover that blankets large parts of the project area. The new geophysical data was used by the Company's geophysical consultants, Hawke Geophysics, to identify ten priority targets for drill testing based on interpreted structural setting and intensity of coincident gravity and magnetic anomalies.

Stage I Drilling

Stage I reconnaissance RC drilling investigated nine of ten high-priority geophysical targets, employing 16 drill traverses, for a total of 71 holes (6,101m). Drill samples were collected at one metre intervals using a conventional riffle splitter and were analysed (XRF) by ALS laboratories in Perth for the standard iron ore suite of elements.

Magnetite gneiss capped by a 10-55m thick zone of oxidized hematite-rich material was encountered at all target areas. A summary of iron grades in the 43 drill holes that intersected significant widths of magnetite gneiss are provided in Table 2 (refer to the link at the bottom of release for tables and figures).

The interpreted true thickness of individual magnetite gneiss units is typically in the range 10-50m though significantly wider zones are present in areas of structural thickening that is particularly evident at the Northwest Fingerpost Hill 1 Prospect and the newly discovered Boomer Prospect.

Northwest Fingerpost Hill 1 is situated in a large-scale anti-form which forms a distinct hill with some of the best outcrops of small-scale second-order folding in the project area. It contains significant near-surface hematite-rich mineralisation which extends over a 250m wide zone to a depth of 55m and occurs as a cap on folded magnetite gneiss.

Notable intersections include:

- 61m @ 43.5% Fe
- 60m @ 43.4% Fe
- 57m @ 39.6% Fe
- 39m @ 42.5% Fe

Boomer is situated below 25 metres of Cainozoic cover. The magnetite mineralisation has a thin cap of hematite-rich mineralization and occurs within a 110 metre wide zone of steeply dipping and folded/faulted magnetite gneiss. The magnetite gneiss has been traced along strike for at least 500 metres and is open at depth.

Notable intersections include:

- 17m @ 40.6 % Fe
- 20m @ 39.0 % Fe
- 42m @ 40.8 % Fe
- 31m @ 42.6 % Fe

DTR Test Work

A total of eighty two samples of magnetite gneiss from four drill holes were selected for a pilot metallurgical study of the beneficiation characteristics of magnetite mineralisation. Metallurgical testing was conducted at ALS laboratories in Perth and comprised Davis Tube Recovery (DTR) test work of 4 metre composites at a coarse grind size of 75 microns.

The results of the initial study suggest excellent beneficiation characteristics of the magnetite. Average iron content of magnetite concentrates is in the range 69-70% Fe with 1.1-2.0% SiO2, 0.6-1.4% Al2O3 and 0.00% P. Most concentrates meet DR grade specifications and all meet or exceed high grade blast furnace requirements.

Ongoing Exploration and Test Work

The results of Stage I drilling are very encouraging and warrant further exploration at Gawler. METS has proposed an oxide (hematite) and magnetite test work programme to assess the metallurgy and mineralogy of each ore type. These studies will focus on cost-effective beneficiation methods such as dry magnetic separation that may allow for relatively simple upgrading of ore, possibly producing a product suitable for sinter feed.

Stage II diamond drilling programme will provide important new information on the structural geology and metallurgy of the known target areas and will also test a limited number of new targets that were identified during the Stage I drilling programme. Stage II drilling will be partly funded by the South Australian Government as part of the PACE Theme 2 - Drilling Collaboration between PIRSA and Industry. Only 23 projects from 63 proposals were successful and are viewed by PIRSA "as the highest quality exploration targets based on sound technical, scientific and commercial criteria".

For the complete Iron Road announcement including figures and Tables 1 & 2, please refer to the following link below:
http://www.abnnewswire.net/media/en/docs/63665-ASX-IRD-504363.pdf

Contact

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