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Company Announcement: Drilling Starts at Snelgrove Lake Iron Ore Project

13th February 2013

  

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Mamba Minerals is pleased to announce that the Phase 1 winter drill program is now underway at the Snelgrove Lake Iron Project in Canada, marking the start of an exploration campaign which aims to establish Snelgrove Lake as a potential world-class deposit. The Phase 1 drilling program will comprise six holes, with an estimated depth of 250-350m to test depth, grade and metallurgy of the extensive magnetite ore that has been identified at Snelgrove through mapping, trenching, grab sampling, and geophysics. The Phase 2 drilling program will commence as soon as practical after Phase 1, with the Phase 2 program being designed based on Phase 1 results. Results from the Phase 1 program will be released at the earliest opportunity.

Snelgrove is located in the Labrador Trough in Eastern Canada. The Labrador Trough is a rapidly emerging iron ore province with annual production of about 50 million tonnes. The region is fast gaining prominence in the iron ore and steel industries, with global majors such as ArcelorMittal, Cliffs Natural Resources and Rio Tinto having established a substantial presence there. Wuhan Iron & Steel, Mitsubishi, South Korea's Posco, India's Tata Steel, China Steel and Hebei Iron & Steel are among those which are in project partnerships.

The Labrador Trough is already noted for its access to existing – and expanding – multi-user rail and port infrastructure as well as hydro-electric power. Under an agreement with Canadian company Altius Minerals (TSX:ALS) , which currently holds the Snelgrove Lake tenements, Mamba will spend an initial C$6.5 million (A$6.5 million) on exploration, including the current six-hole program. Altius boasts a successful track record in the Labrador Trough, having sourced iron projects for the likes of Alderon Iron Ore Corp and Century Iron Mines Corporation.

Geology
The Snelgrove Lake Project comprises iron outcrop associated with the Sokoman Formation (the main ore-bearing horizon in the Trough) over an area 33km long by 200m wide. The first six holes will be drilled in the northern half of this 33km stretch and will target prospective areas identified by strong results from trenching, grab sampling and geophysics. These samples have returned grades of 25-35% Fe from predominantly taconite-style mineralisation, with tests on some selected batches returning grades of 30-53% Fe. These were upgraded in magnetic concentrate to 64-69.5% Fe.

Infrastructure
The Snelgrove Lake Project is 50km south-east of the town of Schefferville and 200km north of Labrador City. A shared-use railway line lies just 65km from the project and runs the 565km distance to the Port of Sept-Iles/Pointe-Noire on the Saint Lawrence River in Quebec. The port is currently undergoing an expansion to accommodate an additional 50Mtpa with further capacity increases already planned to meet the growing demand from iron ore producers.

Hydropower is available in the area at a cost of around C4c/kwh. Mamba Chairman Greg Burns said all the evidence available to date supported Mamba’s belief that Snelgrove had the potential to be of the same world-class magnitude to those iron ore deposits already well established in the Labrador Trough. “Snelgrove is well positioned in  one of the world’s most rapidly emerging iron ore provinces, within close proximity to known and operating iron ore projects controlled  by some of the biggest mining companies in the business,” Mr Burns said. “The early-phase exploration work shows there are extensive iron ore-bearing formations throughout the project. When combined with grades returned from sampling, there is every reason to be confident about the enormous potential of Snelgrove.”

Edited by Creamer Media Reporter

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