Tony Sage’s Fe Ltd (ASX: FEL) has boosted its bulging portfolio with the addition of a 50% stake in the Yarram iron ore project in the Northern Territory.
It represents a step outside Western Australia, where Fe has its other projects.
Yarram was subject to drilling in 2014 by the former listed junior Territory Resources – work that confirmed the presence of high-grade iron ore.
A more recent drilling campaign was undertaken by the private company with which Fe is entering a joint venture – that recent work aiming at gathering environmental information to support a future mining approval application.
Yarram is partially on an existing mining lease on freehold land and is located just over 100km from the Port of Darwin.
There is also adjacent existing, but underutilised, mining infrastructure.
Historical drill results include 108m at 65.6% iron, 2.3% silica, 1.8% aluminium oxide and 0.037% phosphorous from 18m down hole. Another hole returned 65m at 66.4% iron and finished in 65.9% iron.
Fe will be the operator of the joint venture with a casting vote on the majority of key issues.
The vendor of the 50% stake is unlisted Gold Valley Iron and Manganese, which owns the iron ore rights at Yarram.
Fe is paying Gold Valley $1.5 million in cash and shares. A further $1.5 million in cash and/or shares will be paid upon the joint venture reaching a JORC indicated resource milestone.
2014 drill results never published
Territory Resources drilled 35 holes for a total of 2,430m, the information being kept for internal purposes and never previously published.
This 2014 data is the focus of Fe’s decision, with concerns about earlier exploration data due to accuracy and quality issues.
Various holders of the tenement had carried out drilling before 2014 but Fe says the majority of holes were too shallow to intercept the high-grade mineralisation.
Fe claims that, based on the 2014 information, it has an exploration target of between 4 million tonnes and 6Mt, with an iron grade ranging between 60% and 62%.
However, Fe noted there had not been sufficient exploration to estimate a mineral resource.
Iron ore projects getting harder to find
Fe chairman Tony Sage said with iron ore prices at six-year highs, mature iron ore projects are getting harder to find.
“It is even more difficult to find one that hosts high-grade iron ore mineralisation, that’s located just over 100km from a major port, and is in close proximity to existing mining infrastructure,” he added.
Fe will begin a drilling campaign as soon as possible.
The company’s portfolio covers lithium, iron ore, nickel, copper and gold targets in Western Australia, including the Pippingarra and Marble Bar lithium projects.