PERTH (miningweekly.com) – Minerals explorer Ivanhoe Australia has reported a 43% increase in the molybdenum resource grade and a 49% increase in the rhenium resource grade at its Merlin deposit, in Queensland.
The Merlin deposit is now estimated to hold 6,7-million tons of ore, at 1,34% molybdenum and 23,2 g/t rhenium. This was a 9% increase in the contained molybdenum metal and a 15% increase in the rhenium metal, when compared with previous resource estimates.
“This resource upgrade to the Merlin project, previously described as the world’s highest-grade molybdenum and rhenium deposit, results from an additional 107 drill holes and will provide substantial improvement to the project economics as a result of the higher metal revenue that is now contained in a lower resource tonnage,” said Ivanhoe CEO Peter Reeve.
“It improves this outstanding project to a higher level yet again, with average contained metal values of more than A$600/t of ore.”
Reeve noted that with Ivanhoe Australia’s recent agreement to buy the Osborne milling and mining complex, ore from the Merlin and Little Wizard deposits would now be mined progressively from the fourth quarter of 2011.
“This extremely fast path to production and cash flow is very rare in the mining industry and will provide significant cash flow benefits to shareholders in the short term.”
Reeve added that with the recent development of the Merlin resource, Ivanhoe Australia has been “encouraged” to increase its exploration efforts to discover more molybdenum/rhenium zones elsewhere on the company’s tenements.
“As Ivanhoe Australia advances toward cash flow and production, the importance of continuing and expanding our exploration programme will only increase, as exploration remains the foundation of Ivanhoe Australia’s strategy.”
Meanwhile, the prefeasibility study on the Merlin deposit is earmarked for completion in November, with the full feasibility study expected by the third quarter of 2011.
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