Marketing

The ore from the Wilcherry Hill Project has been benchmarked against other iron ore projects, with regard to the DSO and magnetite ores specifications.

The DSO benchmarking graphs shows most projects or operations use a cut-off grade of around 55%Fe for reporting of resources, with some down to 50%Fe. At Wilcherry Hill, using a 50%Fe cut-off, the DSO is comparatively low in grade and has high levels of silica and alumina. The size of the DSO resource is also comparatively small. As a result to meet accepted general market specifications the majority of the Wilcherry Hill DSO will most likely have to be concentrated or upgraded. The ore may have the Fe content increased by grading for size, gravity or magnetic processes. Such upgrading of near DSO ore is increasingly common in Australia as the highest grade reserves become depleted. For example OneSteel upgrade their ore at Iron Duke (taking 55%Fe to >63%Fe), and FMG upgrade (“desand”) their ore in the Pilbara to remove alumina.

The magnetite benchmarking graphs show the Wilcherry Hill iron deposits, despite being small in tonnage, have better characteristics for upgrading or increasing Fe content than most projects. This is demonstrated by the mass recoveries, saleable grade achieved at coarse grind size, low capital and operating costs.

Figure 3.2 DSO Benchmarking, sourced from websites and ASX announcements in August 2009. Numbers for Wilcherry Hill were sourced from IronClad resource model in July 2009, and do not include any beneficiation of the ore.