they announced a drill result today 147m @ 61% Fe grade, this is just 200m West of the BHP tenement, highly likely the Railway deposit continues into their land.
This has to be one of the best drill hits ever achieved by a junior iron ore company in Australia.
Railway is open to the east (toward BHP) and then further East of the BHP tenement have been some very promising drill hits at UMC's Railway East target.
Looks like it's one giant deposit that is shared by both UMC and BHP.
Hi Broadside,
I remember last year when this was first touted that Railway East could be a continuation of the original Railway deposit. Now we are looking at one giant deposit that looks very likely to extend well and truely into BHP's territory.
Bungy from another site posted the O/E report.
Hope the link works.
http://www.keepandshare.com/doc/view.php?id=1158420&da=y
Here is basis of what they have to say.
UMC has announced the assay result for vertical diamond drill hole UI767 - refer to the Company’s announcement of 26th Mar’09 reporting that the drill hole had returned visual iron ore mineralisation of 129m. The assay result returned 148m of continuous high grade Fe mineralisation (61.1% Fe /2.58% Al2O3), including the thickest intersection of bedded Marra Mamba mineralisation intersected at Railway to date (122m at 62% Fe and only 1.88% Al2O3 – refer to Exhibit 1 for further details).
Drill hole UI767 lies towards the centre of the remaining untested zone, ~200m west of the UMC tenement boundary with BHPB Area C, and is part of the ongoing programme to drill out the untested eastern section of the Railway target.
The assay result confirms the trend of thickening high grade bedded Marra Mamba ore past the existing Indicated Resource towards, and potentially into the neighbouring BHPB tenement (Refer Exhibits 1 and 2).
An RC rig has now been deployed to support ongoing diamond drilling within this highly prospective zone to further test mineralisation adjacent to the tenement boundary and extend the target mining zone of the Railway orebody.
Implications
Given Atlas earlier in the week described their drilling results as “outstanding” at its Wodgina target (including 68m @ 60% Fe from surface – refer Exhibit 3 for further details), then it is not surprising to see today’s announcement from UMC described as “tremendous”. The quality and size of the Railway orebody continues to improve and differentiate UMC from its junior peers.
We expect to see the tonnage of UMC’s high grade, low impurity bedded Marra Mamba Indicated Resource (currently 76mt @ 60.2% Fe /2.6% Al2O3) materially expand as further infill and expansion drill results to the east (such as UI767) extend the orebody. The Railway prospect’s current resource footprint is well defined enabling engineering and permitting programmes to be commissioned to progress the project towards production (the Company remains committed to putting the orebody into production by the end of 2010).
While the reported Fe grade and impurities levels of the 148m intersection, and in particular the 122m bedded ore intersection, are already extremely impressive we understand they have been impacted by smaller pockets of shale bands within the ore; if these shale bands were to be taken out (as would be the case when the orebody is mined), the intersection would be even more impressive in terms of grade/impurities, meaning this ore is particularly favourable blending material. The widths and grades/impurity levels included in the orebody, particularly in the eastern section (highlighted in Exhibit 1) indicate significant faulting and structures unlike most Mt Newman Marra Mamba formations.
The current drill programme which is increasing the tonnage of the orebody to the east should, in our opinion, improve the economics of the project and the Company’s ability to negotiate infrastructure access.
As we have previously discussed on a number of occasions we believe the ability of a junior to agree a commercial infrastructure agreement is largely dependent on the grade/blendablity of the deposit and its location relative to infrastructure.
Key Events / Valuation Triggers
Near term news flow is expected to be dominated by the development of the Railway prospect and further exploration drilling results including: results from initial metallurgical test work at Railway; further development of the ongoing engineering and permitting programmes; continued diamond drilling on the untested eastern section of the Railway deposit; results from the new 2009 exploration programme; and ongoing corporate/infrastructure strategy discussions.
Cheers
markcoinoz