Hawsons Iron Ltd (ASX:HIO) is trading higher on identifying mineable near-surface magnetite mineralisation at targeted grades, paving the way for a strategic shift in the company's mining approach that could potentially expedite the full production phase of the Hawsons Iron Project in Far West New South Wales.
The company's stage 2 resource analysis exploration drilling was carried out during the first half of 2023, demonstrating the potential for significant extension along the southwest strike.
However, further exploratory drilling is required to define the extent and tonnage of the near-surface mineralisation.
In response, Hawsons is undertaking planning measures to delineate the scope and cost of the additional drilling, while also seeking necessary regulatory approvals.
Alongside the exploratory drilling, the company also received encouraging preliminary results from sampling and pilot test work programs to validate the redesigned mineral processing circuit.
This progress has brought a positive response from investors with HIO shares as much as 41.67% higher intraday to $0.051.
Warranted further exploration
Hawsons executive chair Bryan Granzien said positive assay results from 10 of 12 reverse circulation (RC) holes drilled within an outcropping area referred to as the Fold Zone to the south of the existing mineral resource warranted further exploration.
“Combined with further physical and geophysical mapping, these results provide a clear basis for additional drilling to define the extent, tonnage and grade of this near-surface mineralisation, for even stronger enhancement of the Hawsons Iron Project’s economics,” he said.
“This also means we have more work to do, such as mapping visible outcropping, ground-based geophysical surveys and surface trenching before undertaking the additional drilling.”
2023 exploration program.
Exploration program
Granzien said the company, as a key action from the strategic review, was targeting access to an additional volume of shallower magnetite ore above a depth of 150 metres with a grade greater than 9% Davis Tube Recovery (DTR) mass recovery to help accelerate the project’s cash flow during the first few years of operation.
“The confirmed presence of mineable widths of targeted-grade mineralisation above the base of oxidation in the southern Fold Zone supports a change in mining strategy to greatly shorten the project’s ramp-up period to full production,” he said.
To further improve the project’s economics and net present value the strategic review recommended a three-pronged action plan comprising:
- additional value engineering analysis to further reduce capital and operating costs;
- a three-stage resource analysis program targeting higher grade ore (> 9 per cent DTR) above a depth of 150 metres, to help accelerate start-up cash flow; and
- fostering collaboration by industry, government and communities to support the development of projects using shared resources and infrastructure in the Braemar mineral province.
Based on the general dip of the structures in the fold zone, Granzien said the high-grade intersections correlated with mapped outcrop, therefore supporting the possibility that they continued to surface or close to the surface.
“This program has achieved our goal by defining prospective, shallow mineralisation in the Fold Zone with the potential to extend significantly further along strike to the southwest, but we need to undertake further drilling to achieve a resource level of confidence in line with the JORC Code 2012,” he said.
The next steps to define the extent, tonnage and grade of shallow mineralisation in the Fold Zone and to the southwest include:
- further delineation of near-surface magnetite mineralisation using mapping of visible outcrop and detailed ground-based magnetic and other geophysical surveys to trace near-surface zones where the structures do not outcrop;
- surface trenching across outcrop and near-surface zones to measure location, width and DTR grade at the surface; and
- drilling on lines to establish the shape, extent and continuity of potentially mineable zones.
The company has sufficient working capital on hand to fund these activities – the cost of which it said would be dwarfed by the potential economic benefits of the project.
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