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MT ALEXANDER IRON - WA (Zenith Minerals 100%)

The Mount Alexander Project is 120 km from the port of Onslow, and 260 km south west of Karratha in the West Pilbara region of Western Australia, close to the Pilbara coast, the sealed North West Coastal Highway and the Dampier Bunbury gas pipeline (Figure 1). Planned rail from the nearby West Pilbara Iron Project (Baosteel/AMCI JV) to a new port development at Anketell Point provides a possible alternative infrastructure solution.

Zenith has discovered that magnetite iron mineralisation occurs in a banded iron formation (BIF) associated with a sequence of amphibolite, dolomite, schist and quartzite of Proterozoic age in the northern Gascoyne Province. The magnetite resource encompasses magnetite-bearing banded iron formation (BIF) units that trend parallel to each other over several kilometres of strike extent (Figure 2). The BIF units dip steeply to the northwest (Figure 3), with drilling and geophysical modelling indicating a depth extent of more than 400 metres. The BIF units, up to 110m in true thickness, are hosted within a Proterozoic sedimentary package that was ductiley deformed during regional metamorphism and subsequently overprinted by small to medium scale ductile to brittle fault and fold structures. Weathering of the BIF horizons has a consistent 20m to 30m vertical depth extent.


In May 2013 the Company announced an Inferred Mineral resource for magnetite iron at Mount Alexander of 535 million tonnes @ 30.0% Fe.   This mineral resource was updated and reported in June 2015 to include magnetite iron zones that extend on to an exploration licence acquired post that May 2013 resource estimate.  The new Inferred Mineral resource (JORC12) for magnetite iron at Mount Alexander is: 565.7 million tonnes @ 30.0% Fe. The resource is the total of the 2013 Inferred Mineral Resource (535.1Mt @ 30.0%Fe) and the updated BIF extensions of the central and south west domains (30.6Mt @ 30.0% Fe).  Details are included in JORC Code Reporting Criteria Section 2 of the June 2015 Quarterly Report.

In addition the Company reported a maiden Inferred Mineral resource estimate for magnetite iron at the Mt Alexander West prospect in June 2015.  That Inferred Mineral resource (JORC12) for magnetite iron at Mount Alexander West is: 25.9 million tonnes @ 22.7% Fe.  The resource is classified as Inferred based on confidence in, and continuity of, the results from the drilling campaigns, detailed aeromagnetic data and detailed structural surface mapping. Details are included in JORC Code Reporting Criteria Section 2 of the June 2015 Quarterly Report.

Substantial additional potential exists for increased tonnage at both Mt Alexander and Mt Alexander West with only ~55% of target BIF drill tested to date. The Company reported in June 2015 a revised additional Exploration Target of 510 to 620 million tonnes @ 25 to 35% Fe (excluding the Inferred Resources), in accordance with Section 17 and Section 38 of the JORC Guidelines 2012. The potential quantity and grade of this Exploration Target is conceptual in nature. There has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource. The Exploration Target has been estimated on the basis of 3D modelling of the along strike extensions of resource wireframes at Mt Alexander and Mt Alexander West by using outcrop mapping (by Zenith and by Jigsaw Geoscience, assays from outcrop rock chip samples taken by Zenith, magnetic susceptibility measurements, 2.5D profile and 3D inversion modelling of detailed ground (~100-200m line spacing) and airborne magnetic (~50m line spacing) survey data by Core Geophysics,. A volume for the magnetite mineralisation was calculated to -100mRL and a bulk density range of 3.1g/cc to 3.7g/cc (consistent with a grade of 25-35wt% iron as magnetite) was applied to the volume derived from the modelling. Further drilling to test the validity of the Exploration Target is planned within the next 2 years subject to receipt of the necessary permits and approvals, and the availability of funding.

A Scoping Study by consultants ProMet was reported to ASX on 10 May 2011. The Study assessed the basic mining, processing and infrastructure requirements, and estimated Capital Costs and Operating Costs. Based on detailed test work on diamond drill core the Study applied a weight recovery of 30.2% at p80 minus 40 micron grind and a DTR concentrate grade of 69.9% Fe and 3.0% SiO2.  The Base Case selected included processing by crushing, grinding, wet magnetic separation. The Base Case transport option for the concentrate was by slurry pipeline 120 km to the coast near Onslow, and transport by barge to an offshore mooring for transfer into ships for export (transhipment).
* The Scoping Study referred to above is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised.

Pre-feasibility study elements undertaken aimed at de-risking the project include; finalised Level 1 and Level 2 flora & flora surveys (which did not identify any major environmental triggers), work on securing access to a project water supply, and investigation of export infrastructure options and bulk material transhipment technology.
As a direct result of the significant fall in iron ore prices the Company has filed applications for retention licences over its Mt Alexander magnetite iron Mineral Resources.   Retention licences and status have now been granted for the Mt Alexander and Mt Alexander West deposits as well as an area adequate to cover key infrastructure that would be required to develop the magnetite iron project.  The retention licence/status will allow Zenith to hold the Mineral Resources but negate any ongoing Department of Mines statutory annual expenditure requirements for those licences.