Baobab Resources has revealed initial drill results relating to the measured resource estimation of the Tenge resource block at its Tete pig iron and ferro-vanadium operation in Mozambique.

Tenge/Ruoni is the easternmost prospect area of the Massamba Group. The Tete project includes Ruoni North and Ruoni South resource blocks, as well as Tenge resource block and Ruoni Flats resource block.

The company completed 35,000m of diamond and reverse circulation (RC) drilling across all four Tenge/Ruoni resource blocks, culminating in the estimation of a JORC-compliant combined resource of 553Mt at 36% iron, 0.4% vanadium oxide and 13.3% titanium dioxide, during the 2011 and 2012 field seasons.

"This will have a significant impact on mining and processing costs over the first decade of production."

The 2013 drilling campaign has been focused on converting the upper portions of the Tenge resource block, representing the first ten to 15 years of the operation as a JORC-compliant measured category.

The company has completed 49 drill holes with an aggregate total of 5,940m, comprising 11 diamond holes for 1,401m and 38 RC holes for 4,905m.

A further 173.9Mt of inferred resources were also estimated at the Chitongue and South Zone blocks to the west, resulting in a global resource base of 727Mt.

Analytical results have been returned from the first ten reverse circulation RC with significant intercepts reporting an average head grade of 42% of iron.

The results, which are in line with the weighted average of 45% of iron, reported from channel sampling of two large trenches straddling the summit of Tenge mountain, are substantially higher than the current 36% of iron of the 553Mt combined Tenge/Ruoni resource.

Baobab is anticipating a 17% increase in head grade, which is expected to result in lower annual run-of-mine tonnages and consequently lower overall mining costs per tonne of pig iron produced.

Baobab Resources managing director Ben James said the RC results to date offer particular encouragement, as they point towards the potential for higher head grades at Monte Tenge.

"This will have a significant impact on mining and processing costs over the first decade of production," James said.