Putu Iron Ore Project, Liberia

The Putu iron ore project is part of a 425km² exploration tenement located in south-east Liberia. The mine includes a 12km ridge of banded iron formation that consists of haematite and magnetite. It is jointly owned by African Aura Mining (38.5%) and Severstal Resources (61.5%).

A pre-feasibility study of the project commenced in the second quarter of 2010, following a 60,000m drilling programme.

Severstal Resources is investing approximately $30m in the pre-feasibility study, which is scheduled for completion in 2012. A feasibility study will follow and is expected to last for about 18 months. Construction will begin within three years from then, while the first production is expected to start in 2016.

The Mineral Development Agreement for the project was formally approved by the Liberian government in September 2010.

Putu iron ore resources

In February 2011, Aura Mining announced an updated resource estimate. The new estimate doubled the resources to 2.37 billion tonnes graded at 34.1% iron from the initial estimate of 1.08 billion tonnes at 37.6% iron.

The resource is categorised into three mineral types: oxidised BIF (CAP) material, haematite BIF (HBIF), and magnetite BIF (MBIF).

The inferred CAP resources are estimated at 126 million tons, graded at 43.9% iron, 7.7% aluminium oxide, 21.4% silicon dioxide, 0.32% phosphorus pentoxide and 6.4% loss of ignition.

The inferred HBIF resources are estimated to stand at 283 million tons graded at 34.3% iron, 1.8% aluminium oxide, 42.3% silicon dioxide, 0.17% phosphorus pentoxide and 1.7% loss of ignition. Inferred MBIF resources within the deposit total 668mt at a grade of 37.8% iron, 0.5% aluminium oxide, 40.8% sulphur dioxide and 0.18 phosphorus pentoxide. A zero cut-off grade has been estimated for the resources.

An additional resource of 364 million tons of magnetite BIF is expected to exist below the 300 relative level.

Putu iron ore geology and mineralisation

Iron minerals within the Putu deposit consist pre-dominantly of magnetite-itabirite. A thick layer of haematite-itabirite lies over the magnetite-itabirite minerals. Mineralisation is high in grade and very high regionally. It contains low values of phosphorous and alumina.

Iron ore exploration and drilling

A 4,000m drilling programme, including 11 drill holes, was completed on a 2.6km section of the ridge in 2010. The maximum drill depth was been 400m. Drilling on four out of the 11 holes ended in mineralisation.

The first hole that was drilled over 63m returned 63.54% iron, including contained haematite. The second hole, drilled over 54.6m, reported 54.21% iron with contained haematite. The third and the fourth hole that were drilled over 49.5m and 367.4m yielded 63.60% iron, including haematite and 39.04% iron, including fresh magnetite respectively. The best results include 91m at 61.3% iron oxidised BIF haematite and 232m at 40.8% Fe magnetite. To interpolate the main grade of the minerals, ordinary kriging was used.

Besides the drilling programme, a 208m-long historic drilling adit located in the middle of the Putu range, approximately 300m below the ridge line, was re-opened and made secure. The adit was brought to a halt while it was still in mineralised material of significant grade.

On re-opening it fully, samples at 2.0m intervals returned a nominal iron content of 42.7% iron. To measure the content of magnetic iron minerals, a magnetic susceptibility test was also conducted on the samples. Along the adit, results revealed substantial increase in magnetic susceptibility at nearly 66m from the mouth of the adit. At that point, the overlying haematitic material was around 60m thick.

Putu iron ore infrastructure

The deposit is situated favourably within a distance of 100km from the Atlantic coast. Situated between the mine site and the coast, the terrain slopes gently and does not feature any major topographic characteristics. Three deep water port sites are found proximal to the mine site, in addition to possible rail routes of 110-140km long. The routes will not require any infrastructural upgrades such as earthworks and bridges.

The stretch from the coast to the south of Putu does not feature any major port. However, large bulk carriers can be accommodated if deep water is found inshore in all the three port sites.