Mesa Minerals Limited
Manganese Ore

Auvex Joint Venture

Mesa has concluded a Farmin and Joint Venture Agreement and a Sales Agency Heads of Agreement with Auvex Resources Limited (Auvex) under which Auvex will be the manager of a manganese ore production joint venture and Mesa will be the manager of a joint ore sales arrangement; roles that draw appropriately on the respective competencies of the two organisations.

The joint venture parties intend to mine the manganese resouces of Mesa’s Ant Hill and Sunday Hill mining leases, initially exporting a medium grade, high iron manganese metallurgical lump ore from Port Hedland to markets in South East Asia. The joint venture parties are targetting production and sale of approximately 200,000 tonnes of ore per annum with the following specification:

  • Mn 42%
  • Fe 10%
  • SiO2 <17%
  • Al2O3
  • P <0.1%
  • K
  • CaO
  • MgO

(NB: Further drilling work scheduled for mid 2008 may increase the annual tonnage target and expand on the targetted lump ore specification. However, our knowledge of the deposit is such that it is unlikely to change the grade targets for Mn and Fe.)

The mining operations undertaken to enable the production and sales of an export grade metallurgical lump ore product will also produce a low grade metallurgical ‘chip’ ore product that the joint venture partners will seek to beneficiate before export and a low grade fines product that will be reserved as feed for a fertilizer grade granulated manganese sulfate (GMS) plant that is proposed to be built at the Boodarie Industrial Estate in Port Hedland.

Ant Hill

MapMesa’s Ant Hill mining lease contains a large resource of medium grade, high iron manganese that prior to 1968 yielded approximately 500,000 tonnes of manganese metalurgical grade lump ore at an average Mn content of 48.3%. (Mining activities at Ant Hill ceased with the opening of BHP’s Groote Eylandt manganese mine.) The deposit is located 360 km by road from Port Hedland as depicted in the accompanying map.

Metallurgical studies have demonstrated the suitability of the ore for use in the Mesa sulfur dioxide leach process. Mining and geological studies indicate that the resource is amenable to mining by small scale open cut quarry methods and where the ore mined was directed to a secondary processing end use, using Mesa’s patented processes, it would provide a long life feedstock supply. These studies also demonstrate that the mining of medium grade lump ore for export is synergistic with the mining and secondary processing locally of lower grades of ore, with each strategy supporting the other and maximising the resource utilization achieved.

Ant Hill - General aerial view, looking NorthAnt Hill - General aerial view, looking NorthThe Ant Hill manganese deposits occur as a number of discrete podiform bodies of various sizes on the Ant Hill mesa. The mesa is a fault bounded elongate feature approximately 1.5km long and 400m wide with a maximum topographic relief of 50m. A prominent cap of strongly indurated manganese and iron forms the top of the mesa. Underlying the cap to a depth of some 20m is a sub-horizontal zone of varying manganese grade. Lithologies vary from silts and shales to massive hard manganese-rich rocks comprised essentially of manganese oxides. Surface mapping, as well as the presence of a number of small quarries left from past mining activity, indicates that only a small portion of the potential mineralisation at Ant Hill has been drill tested. A ‘reserve’ category tonnage has yet to be calculated for the Ant Hill mining lease to JORC standards, although work concluded to date indicates that this lease will yield further metallurgical grade lump ore suitable for export.

  • Two drilling programs, in 1992 and 1998, covered an area of 250m x 400m at the southern end of the mesa. The 1992 data was used to create a resource model which supported an estimated Indicated Resource of 1.42 million tonnes of 25% manganese at a 15% cut-off.
  • Subsequently in 1998, Mesa commissioned a delineation drilling programme and resource estimation over a high grade area of the above resource. The programme entailed drilling seventy four reverse circulation holes on a 20m x 20m grid. A comprehensive geochemical study was completed on the drill samples. The study utilised a domain model, grade modelling using inverse distance weighting and grade tonnage curves to estimate a Indicated Resource of 510,000 tonnes at 30% manganese at a 25% cut-off.
  • A permit is current for a third drilling programme, planned for mid 2008, that will target areas likely to yield early production tonnes. Further drilling will follow on a regular basis for the purpose of near term production scheduling, ungrading of resource definition and long term mine planning.
  • An application has been lodged with the Department of Industry & Resources seeking permission to recommence mining at Ant Hill in June 2008. The initial work will be restricted to clean up works around the old pits and stock pile areas plus the removal of bulk samples for metallurgical testing at laboratories in Australia and at potential customer production facilities. All test work is expected to be concluded by late 2008 with regular shipments planned to commence in early 2009, given that all necessary approvals have been obtained by then.

Sunday Hill

Mesa’s Sunday Hill mining lease, which is located close to Ant Hill, is also a remnant mesa formation that rises 20 to 30 metres above the surrounding plain and has moderate to gentle slopes. The mesa is largely devoid of trees and generally covered by spinifex. The surface consists of skeletal soils to outcrop with some scree slopes and areas covered by colluvium. The geology of Sunday Hill is very similar to that of Ant Hill.

Sunday Hill - Aerial view along North East escarpmentSunday Hill is an outlier of late Precambrian Manganese and Hamersley Group sediments and covers an area of 5 x 5 square kilometres. The sediments form a broad NW plunging syncline and overlie Fortescue Group banded iron and shale units.

On the NE side of Sunday Hill, there is a 1200 metre long outcrop of NW/SE striking ferruginous manganese at the unconformity of the Manganese Group and Fortescue Group sediments. The ferruginous manganese has a width that averages about 25 metres and varies from 20 to 70 metres. It is overlain by Pinjian Chert Breccia and ferruginous sandstone that has some thin pebbly bands (Coondoon Formation) The dips of the sediments that enclose the ferruginous manganese are 30 to 70 degrees to the southwest.

As is the case at Ant Hill, ‘reserve’ category tonnage has yet to be calculated for the Sunday Hill lease to JORC standards, although work conducted to date indicates this lease, like the Ant Hill lease, will yield manganese metallurgical lump ore suitable for export:

  • The two remnant mesas are part of the same geological formation and whilst some differences in ore type have been noted from past sample and drilling, their average grades would be expected to be very similar.
  • In 2001, Bryan Smith Geoservices Pty Ltd (consulting to Mesa) concluded that there was potential for 1.5 million tonnes of ferruginous manganese over the 1200m strike length of outcrops.
  • In July 2002, Mesa commissioned a gravity survey over the mesa identified 5 anomalies which could be related to surface expressions of manganese mineralisation and were deemed to warrant follow up by drilling.
  • In 2006, an initial JORC compliant inferred resource was reported for Sunday Hill of 4.7 million tonnes at an average grade of 18.4% manganese, and further geophysical and drilling work specified for the purpose of upgrading and extending the resource.
  • In 2007 a sub-audio magnetics survey was conducted over the mesa which added two further anomolies that were deemed worthy of follow up drilling.
  • In mid 2008, the joint venture partners have scheduled and permitted additional drilling at Sunday Hill intended to test all geophysical anomolies and improve the resource categorisation.

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