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Lilydale Iron Ore Project

Summary

The Lilydale iron ore project is centred on a thickened part of the Braemar Iron Formation, where iron ore grades may have been enhanced by proximity to the Anabama Granite. A sample collected from the rare outcrop of iron formation returned 58.6% Fe and low levels of contaminant elements. Coincident strong gravity and high intensity magnetic anomalies are likely to indicate the areas of highest iron ore grades and hence the best drilling targets.

Location

The Lilydale iron ore project occurs within EL 3519, which straddles a rural public road, 60 km southeast of the small regional centre of Yunta. The Barrier Highway and the Transcontinental Railway, along which ore is shipped from Broken Hill to Port Pirie and Adelaide, pass through Yunta. A likely railway corridor connecting the resource location to the main railway line would be about 53 km in length.

Geology

The Lilydale iron ore project is hosted by the Neoproterozoic Braemar Iron Formation, which contains known iron ore deposits, such as Razorback Ridge, outlined by previous exploration work in the region. Approximately 20 km strike length of strongly folded Braemar Iron Formation occurs within EL 3519 as indicated by aeromagnetic data and odd sparse outcrops. PIRSA records indicate that no exploration work for iron ore has ever been conducted on EL 3519.

Havilah Exploration

The iron formation outcrops as dense black slabs of variably weathered ironstone (see photographs). Samples taken from outcrop contain variable amounts of iron ranging from 55% for the freshest sample to 35% and 45% for the more obviously weathered material, as determined by a Niton hand held portable XRF analyzer. A subsequent laboratory chemical assay of the 55% Fe sample yielded an actual assay of 58.6% Fe and relatively low levels of the main contaminant elements such as Al, P, Ti and V as listed below.

Aeromagnetic data highlights the Braemar Iron Formation as a highly anomalous linear magnetic zone up to several hundred metres wide in places.

Preliminary interpretation of the aeromagnetic data indicates that within the Lilydale iron ore project area, the Braemar Iron Formation is significantly more magnetic and thickened in proximity to the Anabama Granite as shown in the following oblique 3D view of magnetic intensity.

An initial 2 km of gravity surveying, recently completed by Havilah shows that strong positive gravity anomalies coincide with the areas of intense magnetism, indicating higher density material and hence higher iron contents in the underlying iron formation (marked by the orange, red and white colours in the following diagram). The increased thickness of the iron formation in this area may be the result of thicker accumulation of iron-rich sediments in the original sedimentary basin, and / or subsequent structural repetition caused by folding or faulting.

The area of coincident magnetic and gravity anomalies identified by Havilah is a priority drilling target for high grade iron ore. It covers an area over 1 square km and is at least several hundred metres wide and could potentially yield a very large tonnage with minimal overburden.

If the iron ore grade is satisfactory, or can be upgraded to a commercial product, then the under-utilized Transcontinental Railway located to the northwest at Yunta will be a valuable asset in developing the export market potential of the Lilydale iron ore project. Yunta is about 200 km by rail to the coastal port of Port Pirie.

It is expected that the top thirty or so metres of the iron formations will be weathered as the material found in outcrop is not magnetic. This may provide the opportunity to find a significant quantity of Direct Shipping Ore (DSO) hematitic ore, which would be an excellent platform from which to develop the project.

As the next step Havilah plans a reconnaissance percussion drilling program designed to test the interpreted thickened iron ore horizon with multiple traverses of shallow holes. Given the paucity of surface outcrops, the drilling is critical in understanding the geometry and grade distribution of iron within the iron formations.