- JORC Inferred Mineral Resource Estimate of 67 million tonnes (mt) magnetite at 31.4% Fe with 51.2% SiO2, 1.01% Al2O3, and 0.06% P declared for the Havik Project in December 2012
- Davis Tube testwork from Havik samples show a high quality concentrate with mass recovery of approximately 40% for a concentrate grading at approximately 70% Fe, 2.0% SiO2, 0.3% Al2O3 and 0.01% P
- Additional twelve Exploration Targets identified with a potential tonnage of between 158 mt and 474 mt, grading between 27% and 47% Fe
- Recognised potential for high grade haematite (Direct Shipping Ore) with grades in excess of 60% Fe in the eastern licence area
- Red Rock owns 60% of NAMA Greenland Ltd (“NGL”), (which owns 100% of the 1,570 sq km Melville Bugt licence.
- Melville Bugt Iron Ore Project
The total licence area is 1,570 sq km and is located in the north-west of Greenland, 150km south of the town of Qaanaaq.
Greenland is one of the world’s last mining frontiers. An enormously unexplored region with great untapped resource potential, the retreating ice caps expose additional ground annually. In some areas exploitation may now be possible year round. Transport and logistical access are improving and government incentives encourage exploration and mineral development.
Red Rock Resources interest
The Company has an earn-in agreement with North Atlantic Mining Associates Limited (“NAMA”) under which it was able to increase its 25% holding in NGL to 60% by funding the agreed 2012 exploration programme and declaring a Mineral Resource Estimate (“MRE”).
JORC resource summary
|AREA||CLASSIFICATION||TONNES (mt)||Density (g/cm3)||Fe %||SiO2 %||Al2O3 %||P %|
|Havik East||Inferred Resource||45||3.07||32.1||50.76||0.77||0.06|
|Havik North East||Inferred Resource||22||3.05||30.0||52.12||1.51||0.07|
Iron formation in the Melville Bugt licence area is hosted by the Neoarchaean Lauge Koch Kyst Supracrustals, a sequence of metamorphosed sedimentary and volcanic rocks that share a common evolutionary history with the Mary River and Prince Albert Groups of Baffin Island and mainland Nunavut, Canada. Both formations are highly prospective for iron and are currently the subject of several advanced exploration projects including the 365 mt at 64.4% Fe Mary River Iron Ore Project (Baffinland), 358 mt at 28% Fe Roche Bay Iron Project and 465 mt at 31.1% Fe Tuktu Iron Project (Advanced Explorations Inc.). Of these, the Roche Bay and Tuktu Iron Projects have similar logistical requirements and are geologically analogous to the Lauge Koch Kyst at Melville Bugt and highlight the potential for significant and accessible iron deposits in this geological unit.
Oblique view of the modelled iron formation with adjacent hangingwall and footwall
West-facing cross section showing visual validation of block grades at Havik Asset
Iron formation in Melville Bugt occurs as coarse grained, high quality, magnetite-dominated BIF in the western licence and as haematite with DSO potential in the eastern licence. Mesothermal gold remains a secondary target.
The 2011 exploration season confirmed the existence of significant iron deposits at Melville Bugt, highlighting six key targets and identifying numerous highly prospective iron formations with an estimated combined strike length of over 19km.
Company geologists performed reconnaissance and mapping activities, traversed 500 line km and collected 294 samples with results returning ~35% Fe average with a maximum of >65% Fe and low deleterious elements.
The Company also performed airborne and radiometric surveys covering 13,170 line km and identified five buried magnetic anomalies.
Overall the Company generated two main sets of targets with apparent regional differentiation: magnetite-rich targets in the western half of the tenements and haematite dominant targets with DSO potential in the eastern half of the licence.
Two of five magnetite prospects in the western licence were the subject of the 2012 maiden drill season that defined a JORC Inferred Resource of 67mt at 31.4% Fe, to produce a high quality concentrate. BIF at Havik defines a tightly folded structure that is bisected by a major fault, forming the 45 mt at 32.1% Fe Havik East and 22mt at 30.0% Havik Northeast targets that collectively define the Havik Project.
Other magnetite showings at Havik Central, Havik West and Hans Nielsen Fjeld were identified during the initial 2011 field season and grab sampling returned Fe grades up to 53.7% with 42.3% SiO2, 0.01% Al2O3, 0.002% S and P 0.062%. Further mapping and drilling is required in order to further assess the potential of these targets.
The Tuukkaq anomaly is a ~6km long magnetic anomaly directly along strike of the Haematite Nunatak target in the central licence area that is buried under shallow, slow-moving ice. Consequently Tuukkaq has become a priority target for future exploration.
The 2012 drill programme confirmed significant thicknesses of haematite-BIF at two targets in the eastern licence area. BIF sequences at both Haematite Nunatak and De Dødes West show alteration of primary magnetite to haematite and both targets contain intervals of high grade (>60% Fe) haematite in grab and drill samples. Structural and spatial analysis of these high grade intervals points to iron mobilisation in both areas, highlighting the potential for identification of additional high grade haematite deposits in future seasons.
Grab sampling in 2011 highlighted thick zones of massive haematite grading up to 69.4% Fe in the De Dødes East target and consequently the area is a priority target for future drill programmes.
Initial large scale mapping, reconnaissance and sampling by Company geologists alongside airborne magnetic and radiometric surveys led to the identification of six key exposed targets and a further five buried magnetic anomalies.
The goal for the 2012 field season was to achieve one MRE and secondarily to generate new exploration targets. Activities included the establishment of a base camp, a diamond drill programme, field work and mapping. Drill core was sampled and sent for geochemical assay and initial metallurgical analysis at ALS Minerals Laboratories, Ireland.
The short, intense drill programme was completed in the middle of September and totalled 4,061m in 27 drill holes. Four prospects were drilled, with twelve holes drilled at Havik East, six at Havik Northeast, five at De Dødes West and four at Haematite Nunatak.
One of the main challenges facing burgeoning iron producers is the logistics of transporting ore to world iron customers. Various iron projects have been identified worldwide with many currently stalled in development due to delays caused by inadequate rail and port logistics. Governments are slow to react to changing requirements and affected communities adopt a hostile approach, resisting and blocking expansion. Therefore one of the keys to developing a successful iron ore project is ensuring that the project has a pathway to market.
An additional challenge of operating in Arctic climates is presented by the very specific environmental conditions which have hampered other projects, such as those at Mary River and Isua (Greenland) for a number of years.
Melville Bugt stands out as relatively simple in terms of logistics and infrastructure as its close proximity to natural deep water harbours negates the need for expensive railways or slurry pipelines, which at this latitude would need to be specially engineered to accommodate freezing conditions and permafrost. A key advantage that Melville Bugt holds over other Arctic projects is its shorter sea ice season. These differentiating factors may prove significant in distinguishing Melville Bugt and showing a clear path to production.
The technical demands of maintaining mining and export operations in the high Arctic necessitates a degree of capital expenditure, however the scale of deposits that have been identified in recent years proves that Arctic exploration is worth investment. A number of major players in the iron ore markets are currently involved in advanced projects and are at the forefront of developing new solutions and technologies to the challenges presented. These solutions will be tried and tested over the coming seasons with a view to increasing technical and financial accessibility to these large iron deposits in the high Arctic.
Given the fall in iron prices and overall natural resource sentiment since project initiation, the Company is currently exploring alternative investment and development options for the project.