Balla Balla Project Development
Balla Balla Tenement Location Map
Balla Balla Resources Map
Balla Balla Cross Section
Balla Balla Port Layout
Balla Balla Iron and Titanium CircuitExploration History
The titanomagnetite at Balla Balla was first exploited early in the 20th century by Whim Creek Well Copper Mines who excavated a small amount of surface material for use at their nearby copper operations. For the next half a century the deposit lay undisturbed except for grazing of the overlying pastures by domestic stock.
At the turn of the 1960’s, Lang Hancock, a renowned Western Australian prospector, and geologist Raymond Butler, serendipitously encountered the small hills of titanomagnetite when a reconnaissance aircraft, piloted by Hancock, was forced to land for repairs. Shortly afterwards, in 1960, Mangore Pty Ltd commenced regional Vanadium exploration, which covered the Balla Balla area. Between 1966 and 1993, Garrick Agnew Pty Ltd and Texas Gulf continued the investigation completing drilling and metallurgical tests which indicated significant Vanadium mineralisation in a magnetite seam approximately 20 to 30 metres thick, but the full strike extent of the seam was not realised.
Between 1998 and 2000 Tanganyika Gold NL (“Tanganyika”) executed a thorough drilling program to delineate a mineral resource of 74 Million tonnes at 0.78% V2O5. Tanganyika commissioned a definitive feasibility study to investigate the production of 6000 tonnes per annum Vanadium Pent-oxide. The company withdrew from the project in 2001 following a decline in steel production and vanadium demand.
Contemporaneous with Tanganyika’s activities, Dominion Mining Ltd was active on other parts of the deposit including the Far West and Eastern deposits. Scoping studies into the production of 6,800 tonnes per annum of Vanadium Pent-oxide commenced in 1999. It was decided not to proceed further than scoping level.
In April 2005, Aurox Resources Limited (“Aurox”) entered into an option agreement to acquire 100% of the Balla Balla project. This was the first time studies have included the full 18 kilometre titanomagnetite post the consolidation of the encompassing tenements.
Titanomagnetite Project Development
Aurox commenced work on the Balla Balla Titanomagnetite Project in April 2005 and acquired 100% ownership in August 2007. To date the Company has spent over A$90 million on the project’s development which includes resource and reserve definition, completing a definitive feasibility study for a 6M tpa vanadium rich iron concentrate operation, detailed engineering and plant design, borefield development and equipment procurement. Aurox has secured a 15 year agreement to ship Balla Balla concentrate from the Utah Point multi-user facility at Port Hedland. The Company has also signed two binding 15 year off-take agreements with major Chinese steel-vanadium producers for 100% of its future concentrate production.
The Balla Balla project is located in the West Pilbara mineral fields near the coast and adjacent to key infrastructure including the Northwest Coastal Highway, PEPL gas pipeline and the state’s electrical grid. Australia’s largest iron ore export port at Port Hedland is 100 kilometres to the northeast where the Balla Balla concentrate will be transported via slurry pipeline, dewatered and loaded to ship.
Geology and Mineralisation
The unit of interest is a horizon containing 70 - 95% by volume of titanomagnetite (the Balla Balla titanomagnetite – see simplified geologic cross section). This occurrence of titanomagnetite, within a layered intrusion, has numerous analogues in operating mines worldwide. The contact with the upper, hanging wall gabbroic rocks is gradational, with magnetite decreasing in volume percentage upwards. The titanomagnetite horizon contact with the gabbroic rocks in the footwall is distinct and planar, and in places tectonised. Thickness of the horizon usually exceeds 25 metres, although localised thinning to approximately 10 metres, either as a result of syn-magmatic processes or later structural events, has been noted in some intersections.
Comprehensive mineragraphic studies on representative specimens from the titanomagnetite horizon shows the dominant minerals to be magnetite and ilmenite. The abundance of magnetite is greatest at the base, with increasing amounts of ilmenite towards the top of the horizon.
The vanadium content is greatest at the base of the titanomagnetite horizon near the sharp basal contact, where grades up to 1.1% V2O5 are recorded. The tenor of vanadium mineralisation gradationally decreases upwards, consistent with a normal fractionation trend and suggesting normal (upright) facing of the sequence.
Gabbro in the hangingwall to the titanomagnetite contains up to 25% by volume (approximately 56 wt % P2O5) fluor-apatite (J.Graindorge, 2001 Hons Thesis), typically between 100 to 500 microns in size. Discrete ilmenite grains comprise up to 5 vol % of the hangingwall gabbro.
Resource modelling for this deposit style is a relatively simple procedure. The continuity of the titanomagnetite horizon, lack of complicated structures at mining scale and consistency in material composition allows reliable estimates of resources from widely spaced drilling.
Mineral Resource Estimate
As at the end of 2009 the Mineral Resources at Balla Balla total 456 million tonnes following the completion of resource modelling of the deposit by geological consultants Golder & Associates (“Golder”). The tables below set out the Balla Balla resources by deposit and confidence categories.
Balla Balla Mineral Resource Estimate
Western Pit Area
| Class | Mt | Fe % | V2O5 % | TiO2 % |
| Measured | 98.1 | 45.7 | 0.66 | 14.0 |
| Indicated | 20.6 | 45.5 | 0.69 | 13.5 |
| Inferred | 49.9 | 45.8 | 0.70 | 13.6 |
| Total | 168.6 | 45.7 | 0.68 | 13.8 |
Central-East Pit Area
| Class | Mt | Fe % | V2O5 % | TiO2 % |
| Measured | 103.2 | 45.0 | 0.63 | 14.1 |
| Indicated | 34.3 | 45.1 | 0.62 | 13.7 |
| Inferred | 22.2 | 45.4 | 0.65 | 13.9 |
| Total | 159.7 | 45.1 | 0.63 | 14.0 |
Far West Area
| Class | Mt | Fe % | V2O5 % | TiO2 % |
| Measured | 17.7 | 42.3 | 0.63 | 14.1 |
| Indicated | 31.8 | 43.2 | 0.65 | 13.7 |
| Inferred | 78.1 | 43.1 | 0.67 | 13.4 |
| Total | 127.6 | 43.0 | 0.66 | 13.6 |
Total Balla Balla Mineral Resource Estimate
| Class | Mt | Fe % | V2O5 % | TiO2 % |
| Measured | 219.0 | 45.1 | 0.64 | 14.1 |
| Indicated | 86.7 | 44.5 | 0.65 | 13.8 |
| Inferred | 150.2 | 44.3 | 0.68 | 13.5 |
| Total | 455.9 | 44.7 | 0.66 | 13.8 |
Ore Reserve Estimate
The Balla Balla Ore Reserves total 238 million tonnes and are located in the Western and Central Pit Areas of the project. Importantly, over 80% of the ore reserve tonnage is classified as Proved Ore Reserves. Mining consultants Orelogy Pty Ltd (“Orelogy”) carried out the optimization and design work follows the completion of resource modelling and estimation by Golder & Associates Pty Ltd. The Ore Reserve Estimate represents a 16 year project mine-life based on the current mining schedule.
Balla Balla Ore Reserve Estimate
Western Pit Area
| Class | Mt | Fe % | V2O5 % | TiO2 % |
| Proved | 86 | 45.9 | 0.66 | 14.0 |
| Probable | 6.0 | 45.8 | 0.68 | 13.7 |
| Total | 92 | 45.8 | 0.6 | 14.0 |
Central-East Pit Area
| Class | Mt | Fe % | V2O5 % | TiO2 % |
| Proved | 86 | 44.8 | 0.59 | 13.7 |
| Probable | 21 | 44.9 | 0.58 | 13.8 |
| Total | 107 | 44.9 | 0.59 | 13.7 |
Far West Area
| Class | Mt | Fe % | V2O5 % | TiO2 % |
| Proved | 16 | 41.3 | 0.58 | 12.6 |
| Probable | 22 | 41.9 | 0.58 | 12.8 |
| Total | 39 | 44.9 | 0.58 | 12.7 |
Total Balla Balla Ore Reserve Estimate
| Class | Mt | Fe % | V2O5 % | TiO2 % |
| Proved | 188.0 | 45.0 | 0.62 | 13.7 |
| Probable | 50 | 43.7 | 0.60 | 13.3 |
| Total | 238 | 44.7 | 0.62 | 13.7 |
Notes to accompany Ore Reserve Statement
- Fe cut-off grade is a nominal 35%
- Fresh ore only, no oxide ore included
- The Far West Reserve is based on measured and indicated mineralisation within an optimal shell
- Dilution of 3% at a diluted Fe grade of 38% is included
- Geological Mineral Resource Model – Golder & Associates Pty Ltd, September 2008
Competent Persons Statements
The Balla Balla Mineral Resources were estimated by Mr Richard Gaze of Golder & Associates Pty Ltd. The Balla Balla Ore Reserves were estimated by Mr Steve Craig of Orelogy Pty Ltd. Both parties have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Richard Gaze and Mr Steve Craig consent to the inclusion in this report of the above Resource and Reserve information in the form and context in which it appears.
Surface location of Balla Balla Mineral Resources and Ore Reserves
Notes:
Mineral Resource figures quoted represent Total Fe%. Total Fe% includes in-situ Fe-bearing minerals that may not be amenable to magnetic recovery. Magnetic recovery factors or assumptions have not been applied to the Mineral Resources.
35% lower cut-off grade applied to all models.
Al2O3 and SiO2 respectively average 4.5% and 10.5% across the Resource, however the grade of Al2O3 and SiO2 in the iron concentrate averages1.5% and 2.5% respectively as significant portions are removed as waste during the concentrating process.
Competent Persons Statements
In September 2008 Aurox reported an increase to Measured, Indicated and Inferred Resources of the Western Pit and Central-East Pit areas of the Balla Balla magnetite deposit. In December 2008 Aurox upgraded the Balla Balla Far West area resources from 100% Inferred to Measured, Indicated and Inferred Resources. The information in these reports that relates to Exploration and Minerals Resources is based on information compiled by Matt Chinn and Richard Gaze who are both members of the Australian Institute of Mining and Metallurgy. Matt Chinn is a full-time employee of Aurox Resources Limited. Richard Gaze is a full time employee of Golder Associates. Matt Chinn and Richard Gaze have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Matt Chinn and Richard Gaze consent to the inclusion in the report of matters based on this information in the form and context in which it appears.
Operations
Mining of the Balla Balla deposits will commence at the Central and Western Pit areas using standard open cut techniques. Contract mining will be employed until such time as the operation can acquire its own mining fleet. RH340B shovels loading Cat 789D trucks will initially be used for waste and ore load and haulage. Operating costs are currently estimated at A$36 per tonne of concentrate FOB. The cost is estimated to drop to A$31 per tonne if the operation converts to owner-operator mining.
Balla Balla Site Layout
The Balla Balla iron processing plant is designed to commence at 6 million tonnes per annum (Mtpa) concentrate production with a simple, uninterrupted upgrade to 10 Mtpa planned. Plant and port layout and circuit designs are fixed and detailed engineering has commenced.
The majority of the key and ancillary processing plant equipment is designed to process 10 Mtpa with requirements for a second ball mill, and additional magnetic separators, a tailings thickener and dewatering filters to secure the expansion capacity.
Crushing, grinding to 100 microns and magnetic separation will recover 60% (by weight) of the ore feed as a concentrate containing 58% iron and 1% V2O5.
Balla Balla Processing Plant Design (with 2nd ball mill for 10Mtpa production)
Transport of Balla Balla concentrate to the Multi-user Facility at Utah Point, Port Hedland via a slurry pipeline is the most economic and, socially and environmentally friendly method. Test work and engineering designs are being undertaken to optimise the slurry pipe and associated equipment to allow initial throughput of 6 Mtpa of concentrate, followed by the planned expansion to 10 Mtpa.
Production water bore installation sufficient for long term sustainable production and conveyance of 6 Mtpa of concentrate through the slurry pipe has been completed, with an excess margin of nearly 30%.
The Balla Balla iron concentrate will be shipped from the Utah Point berth due to commence operations in early 2010 by the Port Hedland Port Authority (PHPA). Aurox has secured a 15 year agreement with the PHPA which includes an exclusive area to construct an Aurox owned and operated dewatering facility including concentrate stacker and reclaimer capable of loading ships at 7,500 tonne per hour. The location of the future PHPA berth and port development area allocated to Aurox is shown below.
Environmental Management
On 28 April 2009 Aurox announced it has secured Ministerial environmental approval from the WA Government for the Balla Balla Project. Aurox received the Approval notification from the WA Minister for Environment marking another major milestone in the development of the project.
The Approval is a pivotal milestone for the Company and its shareholders as it ensures the Balla Balla Project can be developed as soon as financing is secure.
The environmental green light is the crucial Approval financiers now look for when considering the commitment of funds to projects like Balla Balla, as they can be assured their investment can be put to work immediately.
Securing Ministerial Approval for the Project moves production at Balla Balla another step closer. Engineering of plant and port infrastructure is well advanced including a secure 15 year port access agreement with the Port Hedland Port Authority for the Utah Point multi-user facility.