The company said work would begin immediately on an additional resource definition drilling campaign on the Blacksmith tenement, which together with the Anvil tenement comprises the company’s Pilbara iron ore interest. Flinders Mines’ Chairman, Robert Kennedy, said the decision to move to the next evaluation stage for the project followed the release of the new scoping study.

“The independent study found the whole project had the potential to proceed towards development of an economic longlife iron ore mine. Significantly, the prefeasibility study will have the objective of recommending a preferred development option as there are now several mineralized areas which could support mining, clearly identified within the tenement,” Kennedy said. “[We have] also identified Bedded Iron Deposit (BID) intersections well outside the current resource areas so evaluation of these should also impact positively on future total resource tonnage and iron grade estimates.”

The scoping study, undertaken by Adelaide-based AMC Consultants, reviewed the mining, beneficiation, transport and sale options available to Flinders Mines for development of its Pilbara iron resource. Key findings indicated that the Delta deposit on the eastern flank of the Blacksmith tenement presented optimal grade opportunities and a low stripping ratio and should be the focus for the company’s studies for any start-up mining operations.

Flinders’ Managing Director, Kevin Wills, said, “We will undertake a major diamond and reverse circulation drilling program on Delta in the coming quarter with the intention of moving its current Inferred Resource of 148 million tons to Indicated Resource status.

“Delta’s grade and stripping ratio—and the fact it has the highest tonnage of BID material of all of the deposits identified to date—obviously favors making it our priority so that we can maximize early cash flows and the potential to further increase the BID resource. We will also commence an extensive 35 to 40 hole diamond drilling program to provide representative samples for metallurgical testing focused on the physical properties of the ore types and possible beneficiation. New BID targets will also be generated with the intention to drill test early in 2010.

“Initial extension drilling at Blackjack, Champion, Delta and Eagle intersected BIDs as much as 200 meters and in some cases beyond 500 meters, outside the current resources areas.”

Separate to the scoping study, the company said new resource estimates by Golder Associates have defined an initial JORC Inferred Resource for the Ajax deposit of 35 million mt grading 54.9% Fe. This estimate is based on a +50% iron cut-off, an estimate Wills said was below original exploration targets due to more detailed weathering impacts, mineral depth and continuity were accounted for.