for personal use only ph: +61 8 9483 2000 - asx · maitland river 310 34.7 34.7 42.0 1.4 0.06 -0.09...

1

Quarterly Activities Report For the period ending 30 June 2011 ASX : IOH

ACN 107 492 517

HIGHLIGHTS

Overview

Continued exploration success resulting in the Company’s total JORC Mineral Resource reaching 1,019 Million Tonnes (Table 1).

Central Pilbara Hub

JORC Mineral Resource at the Iron Valley Project increased from 240Mt to 259Mt (an 8% increase) with an average grade over the deposit of 58.3% Fe at a 50% Fe Cut-off grade.

Advanced status of Iron Valley Pre-Feasibility level studies including Mine Study by SRK and Environmental and Water Studies by URS.

A Strategic Review of IOH’s Central Pilbara Satellite projects commenced during the Quarter.

Drilling and commercial development are continuing.

Western Pilbara Hub

Mine Concept Study on the Bungaroo South Project delivered positive results. The project contains 241 Million Tonnes of Inferred JORC Mineral Resource of CID @ 57.2% Fe.

Drilling and commercial development are continuing.

Coastal Pilbara Hub

Maiden Inferred JORC Mineral Resource of 310Mt, with an average grade over the deposit of 34.7% Fe at Maitland River Magnetite Project.

Drilling and commercial development are continuing. ASX Announcement: 29 July 2011

Issued Shares: 166,087,005 ASX Code: IOH Cash position: $42m at 30 June 2011

For further information regarding Iron Ore Holdings Ltd contact: Alwyn Vorster Managing Director Ph: +61 8 9483 2000

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Quarterly Activities Report For the period ending 30 June 2011

IRON ORE HOLDINGS LIMITED (ASX: IOH) 2 29 July 2011

Mineral Resource Update During the quarter Iron Ore Holdings Limited (“IOH” or “the Company”) announced a maiden Mineral Resource at the Maitland River Magnetite Project (within the Coastal Hub) and at the Bight Project (within the Central Pilbara Hub) as well as Resource upgrades at the Iron Valley, Fingers and Boundary projects within the Central Pilbara Hub. IOH has increased its total JORC Mineral Resource to 1,019Mt as illustrated in the Table 1 and Figure 1. IOH is currently planning substantial exploration drilling programmes for FY2012.

Table 1 – IOH JORC Mineral Resource within Central, Western and Coastal Pilbara Hub

The Company now has a Central Hub Resource comprising bedded Hematite and Channel Iron Deposits (CID) of more than 467Mt within a 50km radius of existing rail infrastructure, a Western Hub Resource (CID) in excess of 242Mt and a Coastal Hub magnetite Resource of 310Mt located close to existing and planned infrastructure (as shown in Figure 1).

Project/Tenement JORC

Indicated (Mt)

JORC Inferred

(Mt)

Fe

(%)

CaFe

(%)

SiO2

(%)

Al2O3

(%)

P

(%)

LOI

(%)

Cut-off

(Fe)

Iron Valley 216.3 58.4 63.0 5.1 3.1 0.18 7.3 50%

Iron Valley 42.8 57.9 61.1 7.0 3.9 0.14 5.2 50%

Phil’s Creek 15.1 55.6 60.5 7.2 4.2 0.10 8.1 50%

North Marillana 46.8 50.0 55.8 9.5 7.7 0.05 10.4 45%

Lamb Creek 15.2 60.6 64.5 4.4 2.2 0.13 6.0 50%

Lamb Creek 24.5 54.9 58.6 10.3 4.0 0.09 6.3 50%

Koodaideri South 106.8 58.6 63.7 5.1 2.5 0.14 7.9 50%

Bungaroo South 241.6 57.2 62.2 7.0 2.4 0.15 8.1 50%

Total Hematite Resource

293.4 415.7 709.1Mt

Maitland River 310 34.7 34.7 42.0 1.4 0.06 -

0.09 25%

Total Magnetite Resource

310 310.0Mt

IOH Total Resource

293.4 725.7 Total Resource (Indicated and

Inferred) 1019.0Mt

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Figure 1 – Pilbara Regional plan – Location of IOH tenements and projects location

2 Exploration Overview During the quarter IOH conducted drilling activities within projects located at Central, Western and Coastal Hubs (refer Figure 1).

Central Pilbara Hub A total of 4,682 metres of RC drilling was completed at Iron Valley, Kurrajura Project and

the Wedge prospect. Western Pilbara Hub

A total of 1,044 metres of RC drilling was completed at the Ricane prospect, which is located within the Buckland Hills tenement.

A total of 323 metres of diamond core drilling was carried out within the Buckland Hills tenement.

Maitland River

RC drilling was completed at the Maitland River Project for a total of 5,600 metres. F

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2.1 Iron Valley Project

2.1.1 Exploration

An additional drilling campaign of 37 holes for 3,577 metres was completed in May 2011 followed by resource modelling. The total resource estimation at Iron Valley is now based on the results of 461 drill holes totalling 57,232m of drilling of which 5,982m was diamond core drilling. The resource is generally based on 100m spaced gridlines, with 50m to 100m spacing between holes along the gridlines (refer Figure 3).

Figure 3: Iron Valley Project - Resource outline with location of drill collars

As a result of this drilling campaign, the Iron Valley deposit now has a JORC Indicated and Inferred Mineral Resource of 259.1Mt @ 58.3% Fe (refer Table 1), which represents an increase of 8% from the previous estimation announced in May 2010. Total Indicated Resource has increased from 183.0Mt to 216.3Mt and is 83% of total Resource at Iron Valley (increase from 76%).

Resource Classification

Tonnes (Mt)

Fe(%) CaFe (%)

SiO2 (%)

Al2O3 (%) P(%) LOI

(%) Cut-off

(Fe)

Indicated 216.3 58.4 63.0 5.1 3.1 0.18 7.5 50%

Inferred 42.8 57.9 61.1 7.0 3.9 0.14 5.2 50%

Total 259.1 58.3 62.6 5.4 3.3 0.17 6.9 50%

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2.1.2 Results of Metallurgical test program

Metallurgical testwork was completed on PQ diamond core samples from 5 drill holes (total 573.8m) which were drilled along strike of the ore body (refer Figures 3). The purpose of the metallurgical test work was to characterise the Iron Valley mineralisation and to develop a flowsheet for crushing and processing.

In-situ density, Unconfined Compressive Strength (UCS) and Crushing Work Index (CWi) were measured on the core. The testwork indicates that the project has potential to produce a lump proportion of approximately 37%. This was determined by drop tower and mixer conditioning followed by crushing and screening to lump and fines products.

Lump and fines head assays and in-situ moisture were determined on 4m intervals. Dry size analysis of lump and fines was carried out, firstly with all samples included (refer Table 3) and secondly with low grade intervals excluded, as shown in Table 4. Product grades showed Al2O3% levels below 2% and superior to most Pilbara ores, SiO2% and S% were acceptable. P values improved but remained elevated.

Table 3: High Grade (Dry Product Grade – Fe cut off x%)

Product Type Fe CaFe SiO2 Al2O3 P LOI

(%) (%) (%) (%) (%) (%)

Head Grade 61.9 65.61 2.59 2.25 0.18 5.66

Lump 62.0 65.79 2.51 2.1 0.17 5.76

Fines 61.7 65.40 2.65 2.34 0.19 5.66

Table 4: High Grade (Dry Product Grade - Fe cut off x%)


(%) (%) (%) (%) (%) (%)

Head Grade 62.9 66.3 2.12 1.82 0.18 5.19

Lump 63.1 66.7 2.04 1.63 0.17 5.32

Fines 62.7 66.1 2.16 1.93 0.18 5.17

Assay results for wet sizing of the Iron Valley fines composites show that the fines are superior in quality to normal Pilbara fines with the exception of P% levels. Concentration of SiO2% and Al2O3% in the <20 micron fraction indicates that wet processing will improve the overall fines grade. The yield of wet screened fines deslimed at 15 microns was 85%. Al2O3% and P% levels were improved by removal of the slimes (refer Table 5).

Table 5: High Grade (Wet Processed Fine Product Grade)


(%) (%) (%) (%) (%) (%)

HG Fines Deslimed @ 15 microns

63.5 66.6 2.06 1.71 0.17 4.68

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2.1.3 Project Studies

In March 2011 IOH announced the appointment of Steffen Robertson Kirsten (SRK) to undertake a Mining Study and URS to undertake an Environmental and Hydrological Study as part of the company’s broader Phase 1 Pre-feasibility Study (PFS) activities for the Iron Valley Project

The objectives of this phase of the PFS activities are firstly to update the Scoping Study finalised in 2010 with regard to Mineral Resources and mine planning, and secondly to identify and investigate long lead technical and environmental matters which require definition during a Phase 2 PFS and a definitive feasibility phase which will follow. This work is well progressed with reports expected by early August.

2.2 Western Pilbara Hub

2.2.1 Exploration

Drilling was undertaken at the Buckland Hills Tenement with 1,044 metres of RC drilling being completed at the Ricane Prospect and 323 metres of diamond core drilling within the Buckland Hills tenement. Diamond core drilling is continuing and is expected to be completed by the end of Q4 2011.

2.2.2 Project Studies

In May 2011, IOH announced that Steffen Robertson Kirsten (SRK) has completed the Mining Concept Study on the Bungaroo South project. The study was completed on time and within budget. The Bungaroo South Project is located within the Company’s Western Hub on its large Buckland Hills tenement approximately 45 km southeast of Pannawonica, 35 km from existing Robe rail infrastructure and 30 km from the proposed Australian Premium Iron (API) JV’s planned rail infrastructure to Anketell port (see Figures 4 and 5). The study was carried out on the current Bungaroo South Inferred JORC Resource of 241 million tonnes of CID with average Fe grade of 57.2% (see Table 1). The SRK study considered all the key mining design concepts, identified risk factors and long lead activities, and provided preliminary financial parameters for the project. The study highlighted the following:

Potentially low waste component and a simple crush and screen process into a fines product, resulting in favourable mine operating cost

Two staged mine development allowing the Western Deposit to be developed first with potentially simple and cost effective water management initiatives required

Possible technical synergies for both IOH and API should Bungaroo South be co-developed with the adjoining API deposit

Study supported progressing to the next stage of pre-feasibility study level activities Consideration of road, rail and port infrastructure requirements will be considered as part of further studies.

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Figure 4: Western Pilbara regional map

Figure 5: Bungaroo South Location Map

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2.3 Coastal Hub – Maitland River Magnetite

2.3.1 Exploration The Maitland River Project is located approximately 10km from the Pilbara coast, 50km to the southwest of Karratha, and adjacent to the North West Coastal Highway (refer to Figure 6).

Figure 6: Iron Ore Holdings – Maitland River project location

Iron mineralisation is hosted within the magnetite-bearing banded iron formation (BIF) of the Archaean Cleaverville Formation. This unit crops out within the southwestern corner of the tenement area with around 4.5 km exposed along strike; 3.5 km of which crops out as steep-sided rugged ridges.

A Stage 1 drilling campaign of 24 RC drill holes for 6,176m was completed in May 2011. The drilling was generally based on 400m spaced grid lines, with an average of 200m spacing between holes along the grid lines. Initial resource modelling was based on only 8 drill holes located in Area B (refer Figure 8), with chemical assays still being processed for Area A and Area C.

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Figure 8: Maitland River Project - Resource outline with location of drill collars

As a result of this drilling campaign and initial resource modelling, a JORC Inferred Mineral Resource of 310Mt @ 34.7% Fe was delineated as announced on 4 July 2011 (refer Table 1). On the basis of the initial tenement mapping and aerial surveys, there appears to be significant potential for further magnetite mineralisation in the currently undrilled parts of the Maitland River tenements.

2.3.2 Project Studies Following this first phase of Maitland River resource definition, IOH will commence planning of a Concept Study on practical options for mining and connecting infrastructure. The approvals process to obtain further land access permits is to commence, which will facilitate the second phase of drilling.

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3 Commercial Update

3.1 Iron Valley Discussions continue with potential project partners for the commercialisation and development of IOH’s flagship deposit in the Central Pilbara.

3.2 Central Satellites As part of the previously announced commercialisation process, a formal “Strategic Review” of IOH’s Central Satellite Projects and Prospects (“Central Satellites”) has commenced. The Satellites are located in IOH’s Central Hub, approximately 100km northwest of Newman in the Pilbara Region of Western Australia (WA) – see Figures 1 and 2. The Satellites comprise six deposits across four tenement groups that host a combined Resource of over 208Mt (see Table 2) with significant additional resource potential. The Strategic Review includes options such as development by IOH, JV with interested parties, or sale of the Satellites in whole or in part. PCF Capital Group (“PCF”) has been appointed as corporate advisor to assist IOH with the process. It is anticipated that the process will continue until late Quarter 3 CY2011, after which IOH will make further decisions on the preferred development model for the Satellites.

Table 2: Satellite description

Project Resource Stage Tenement

Kurrajura area including Kurrajura Fingers Bight:

106.8Mt @ 58.6% Fe 53.7Mt @ 58.2% Fe 29.5Mt @58.5% Fe 23.6% @ 59.7% Fe

Concept Mine Plan E47/1539

Koodaideri South Exploration

Boundary 39.7Mt @ 57.1% Fe Exploration E47/1238

Bedded Hematite Sub Total 146.5Mt @ 58.2% Fe

Extension 46.8Mt @ 50.0% Fe Exploration M47/1353, 1354, 1355,

1356 North Marillana

Phil’s Creek 15.1Mt @ 55.6% Fe Definitive

Engineering Study

M47/1359, 1360, 1421 South Marillana

CID Sub Total 61.9Mt @ 51.4% Fe

Total 208.4Mt @ 56.2%

Fe

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Figure 2 –Location of Central Pilbara Deposits

3.3 Bungaroo South

IOH is in discussions with potential project partners and other role players to develop solutions for mine, rail and port options for the Bungaroo South deposit.

4 Corporate Update During the period IOH issued 25,000,904 shares at a price of $1.60 per share under a renounceable pro rata offer of two (2) new shares for every eleven (11) shares held. The pro rata offer was fully underwritten by Fosters Stockbroking Pty Ltd and raised $40.1M before costs. In addition, during the quarter, 2,363,281 listed options and 750,000 unlisted options were exercised raising a total of $3.2M. Funds received from the pro rata offer and exercise of options is to be utilised to progress exploration activities and studies on the Company’s projects.

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5 Q1 FY2012 Planning

5.1 Iron Valley The focus of Q1 FY2012 is to continue Phase 2 pre-feasibility study and commence early definitive feasibility study activities with the aim of progressing the potential long lead technical and environmental matters. In addition, discussions are continuing to advance rail and port options and to explore commercialisation opportunities.

5.2 Central Satellites Additional resource targets within the Central Satellites have been identified and exploration drilling is planned with the potential for further resource upgrade. IOH’s preferred development model for the central satellites is subject to the outcome of the current Strategic Review process.

5.3 Bungaroo South and Western Satellites Diamond core drilling will continue within the Buckland Hills tenement and additional RC drilling is planned for prospects within the area. Following the completion of the Mining Concept Study at the Bungaroo South Project, IOH will commence key mine Pre-feasibility study activities.

5.4 Maitland River Further exploration drilling is being planned for the Maitland River Magnetite Project to potentially identify further magnetite mineralisation in the undrilled parts of the Maitland River tenements. IOH will commence planning of a Concept Study on practical options for mining and connecting infrastructure and will progress metallurgical test work.

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For more information regarding Iron Ore Holdings Ltd please contact:

Alwyn Vorster Managing Director T: (08) 9483 2000 F: (08) 9321 0322 E: [email protected] W: www.ironoreholdings.com

Ordinary Shares on Issue: 166,087,005

About Iron Ore Holdings

Iron Ore Holdings Ltd (“IOH”) is an ASX listed company which owns and manages a portfolio of high-quality iron ore tenements and projects within its Central and Western hubs in the Pilbara region of Western Australia. The company’s projects are all strategically located within close proximity to existing and planned infrastructure. IOH has a stable share register and highly experienced Board and senior management team.

Visit: www.ironoreholdings.com

Competent Persons Statement: The information in this report that relates to exploration and drilling results is based on information compiled by Mr Manohar Ghorpade, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Ghorpade is a full time employee of Iron Ore Holdings Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Ghorpade consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Mineral Resources has been compiled by Mr Lynn Widenbar, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Widenbar is a full time employee of Widenbar and Associates and produced the Mineral Resource Estimate based on data and geological information supplied by IOH. Mr Widenbar has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves. Mr Widenbar consents to the inclusion in this report of the matters based on his information in the form and context that the information appears. F

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for personal use only ph: +61 8 9483 2000 - asx · maitland river 310 34.7 34.7 42.0 1.4 0.06 -0.09...

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