24 April 2019

Iron Ore Scoping Study Update


SIMEC Mining’s internal scoping study and due diligence work is nearing completion with positive results reported.

Exploration drilling has greatly expanded the known area of iron ore mineralisation, justifying infill drilling to define a JORC resource.

Results from testing of Maldorky samples show that targeted product grade of 65% Fe and 40% product yield for an overall 85% Fe recovery can be achieved with conventional processing methods.

Potential opportunity to reduce comminution capital costs and process water requirements using alternative grinding technology.

Havilah Resources Limited (Havilah) is pleased to provide an update on the due diligence work program being led by SIMEC Mining (ASX Announcement 20 June 2018) on Havilah’s Maldorky and Grants iron ore projects in northeastern South Australia, near Broken Hill. The scope of work is to assess the resource, project life, production, infrastructure and ultimately commercial viability of the iron ore projects.

This work commenced in June 2018 and SIMEC Mining has an exclusivity period until the end of April 2019 (ASX Announcement 28 March 2019) in order to complete its work program.

SIMEC Mining has provided Havilah with an update on the status of the internal scoping study work program with encouraging overall outcomes to date as reported below.

Mineralisation Potential

The recent Grants Basin drilling program has confirmed a greatly expanded area of iron ore mineralisation comprising thick, continuous iron formation over an area of at least 3.5 km2 (ASX Announcement 4 December 2018). A new diamond drillhole in Grants Basin (ASX Announcement 29 January 2019) completed at a final depth of 624.4 m to obtain metallurgical samples returned an exceptional 486 m continuous downhole thickness of iron bearing sequence.

An Exploration Target* of 3.47 - 3.79 billion tonnes of mineralised iron formation grading 23.9-27.6% Fe (ASX Announcement 5 April 2019) has been estimated for the Grants Basin discovery (*The potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. The Company confirms that it is not aware of any new information or data that materially affects the Exploration Target* and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed).

Results are considered to be sufficiently encouraging to warrant a resource drilling campaign with the objective of defining a JORC resource of sufficient size to support a viable commercial operation in terms of mine life and processing plant throughput.


An extensive metallurgical testing program was undertaken on Maldorky iron ore drillcore samples using a conventional processing circuit that included crushing and grinding followed by gravity and magnetic separation. Results to date have demonstrated the targeted product grade of 65% Fe and mass recovery level of 40% can be achieved, as well as a high total iron recovery of 85%. While the initial program was focused on the Maldorky deposit, diamond drillcore from Grants Basin is currently being tested to validate replication for both deposits. More detailed results of the Maldorky ore testing are shown in Table 1 and accord with the results generated by Havilah’s own ore beneficiation test work in 2014 (ASX Announcement 1 September 2014).

The testing program also identified a potential opportunity to reduce the capital cost of comminution by employing alternative dry grinding technology that simplifies the circuit and eliminates the requirement for water in front end processing.

Table 1 – Results of Maldorky iron ore metallurgical testing

*Minor elements are calculated. Wilfley Table is a type of gently sloping shaking table that is a very effective gravity concentration method. LIMS refers to low intensity magnetic separation. WHIMS refers to wet high intensity magnetic separation.

Infrastructure & Services

Initial investigations into both rail and slurry pipelines to transport concentrate from the mine site to Whyalla are being carried out. Findings to date show that the existing east-west Transcontinental rail corridor has capacity to carry an additional 10 Mtpa, with minor modifications only to some of the existing passing lanes. Further work to investigate opportunities to reduce cost associated with concentrate transport continue.

Conceptual power requirements for the project have been estimated and potential supply options have been identified. Initial investigations identify potential savings on power costs through supply optimisation. Future work will explore potential hybrid power options to determine if costs can be further reduced.

Investigations are ongoing to source a suitable water supply to sustain the project. Desktop studies are underway to review regional groundwater sources and to develop a scope of work to validate the preferred supply. Sourcing the relatively large volumes of water required for the project remains a key focus of the work program, hence the importance of any dry processing efficiencies that can be confirmed.

Next Steps

Pending a favourable assessment of the internal scoping study and successful negotiation of the commercial path forward, a follow up prefeasibility study (PFS) would include the following key steps:

1.Additional drilling to establish a JORC mineral resource estimate at the Grants Iron Ore Basin to support the required mine life and design production rate.

2.Develop the preferred flowsheet, and define supporting infrastructure requirements.

3.Evaluate downstream concentrate utilisation and market analysis.

4.Finalise strategies to source water and power to support the project.

5.Commence environmental baseline studies and stakeholder engagement to support project permitting process.

It is anticipated that the completion of the scoping study will align closely with the end of the current exclusivity arrangement after which a decision to proceed with the PFS can be made.

Commenting on progress of SIMEC Mining’s due diligence, SIMEC Mining’s COO, Mr Matthew Reed said: “Outcomes of our work to date on Havilah’s Grants and Maldorky projects are very encouraging.

“The scoping study work program has provided valuable insight into the nature and potential size of the iron ore deposits, results achievable by conventional processing methods, product transport options and possible areas of cost reduction.

“The scoping study provides the platform for productive negotiations with Havilah on a commercial path forward for the Grants and Maldorky projects,” he said.

Commenting on progress of the SIMEC Mining due diligence, Havilah’s Technical Director, Dr Chris Giles said: “Havilah and SIMEC Mining have been able to identify sufficiently extensive iron ore mineralisation in the Grants Basin to warrant an infill resource drilling campaign.

“Comprehensive metallurgical testing of Maldorky iron ore samples has confirmed that it can be beneficiated to a high quality, 65% Fe product with favourable yields (40%) and high overall Fe recovery (85%).

“These results, along with favourable logistics support progressing to a PFS study in order to determine the prospects of defining a commercially viable mining and processing operation in the region,” he said.

Table 2 – Details of diamond drillholes from which core samples were taken for metallurgical test work

*All drill core of HQ size (63.5 mm diameter)

CTDD003 & 6


CTDD001 & 5

Figure 1 Oblique 3D view of a portion of the Maldorky resource envelope (blue colour) showing the location of diamond drillholes which provided core samples for the metallurgical test work. Core samples from earier Havilah diamond drillholes CTDD001-003 were used predominantly for the beneficiation test work. Recent SIMEC Mining diamond drillholes CTDD005 &006 provided core mostly for the comminution test work (refer to JORC Table 1).

Cautionary Statement

This announcement contains certain statements which may constitute “forward-looking statements”. Such statements are only predictions and are subject to inherent risks and uncertainties which could cause actual values, performance or achievements to differ materially from those expressed, implied or projected in any forward looking statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.

Competent Persons Statement

The information in this announcement that relates to Exploration Targets, Exploration Results and Mineral Resources is based on data and information compiled by geologist, Dr Chris Giles, a Competent Person who is a member of The Australian Institute of Geoscientists. Dr. Giles is Technical Director of the Company and is employed by the Company on a consulting contract. Dr. Giles has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activities being undertaken to qualify as a Competent Person as defined in the 2012 Edition of ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr. Giles consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears. This information has been prepared to comply with the JORC Code 2012.

For further information visit

Contact: Dr Chris Giles, Technical Director, on (08) 8155-4500 or email: [email protected]


The table below is a description of the assessment and reporting criteria for the Maldorky metallurgical test work in accordance with Table 1 of The Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Section 1 Sampling Techniques and Data

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)