IMX Resources has discovered two gravity anomalies at the Tomahawk Group area, which were tested by a four-hole reverse circulation drill programme.
The project is located near the company's operating Cairn Hill iron ore mine in South Australia.
According to the company, all holes intersected magnetite partially altered to hematite on the Mt Woods tenements, which was visually recognised by IMX geologists during drill cuttings.
The geophysical techniques applied by IMX can be used as search tools for direct shipping hematite mineralisation.
IMX will now focus on identifying other prospective areas, following the successful application of the geophysical techniques.
The company will use geological filters such as structures, faults and granitic intrusives, to better refine the geophysical targeting.
The project lies within an iron-rich geological terrain, the Mt Woods Inlier that hosts Arrium Mining's Peculiar Knob and Hawks Nest direct shipping hematite projects.
IMX acting managing director John Nitschke said that the company has confirmed the presence of hematite on the Mt Woods leases and has verified its exploration model, including the application of ground-based gravity as an exploration technique.
"Any direct shipping hematite discovery has the potential to be developed relatively quickly and at low cost, using our existing mining and operational expertise at Cairn Hill and leveraging off our infrastructure access," Nitschke said.
Image: Mt Woods Magnetite project is located in South Australia. Photo: courtesy of IMX Resources.