Major iron ore resource discovered in Trans-Tasman Resources offshore ironsands project

Sources: Trans-Tasman Resources and Lindsay Clark

Paul Berend, managing director of Trans-Tasman Resources, said it plans to carry out extensive drilling after attracting a US-based private equity fund Denham Capital as a 48% partner.

Trans-Tasman said work to date outlines an initial economically recoverable resource of iron ore of circa 1.2 billion tonnes of iron ore at 60% iron (Fe) content.

The company has also published figures indicating the ultimate potential of the iron sand mineral resource within one of its prospecting permit areas off south Taranaki – Wanganui could possibly be up to 9 billion tonnes of 60% Fe with also substantial volumes of vanadium and titanium as a by-product to steel.

Mr Berend said the initial investment of capital by Denham Capital would be used to fund additional offshore low impact drilling campaigns, test work on the processing and upgrading of the iron sand to a saleable concentrate, and also the extensive environmental studies that are necessary to establish the sustainability of a potential off shore mining operation.

This new investment by Denham would enable Trans-Tasman “to prove the extraordinary potential of the mineral resource” and comply with the joint ore reserves committee (JORC) reporting standards.

Mr Berend was formerly a Rio Tinto Iron Ore general manager of business development and also was general manager of corporate strategy for ArcelorMittal, the world’s largest steelmaker.

He said initial prospecting work at Trans-Tasman’s tenement indicated it could contain a very large and very low cost off shore iron ore resource that would be far more environmentally sustainable to develop than comparable land borne deposits.

An offshore dredging operation would require no chemicals or tailings dams (like a land borne operation) and would be located far from environmentally sensitive areas such as reefs or rocky outcrops, Mr Berend said. In addition the ironsands contain iron, vanadium and titanium, so an ironsands mine could potentially replace three traditional mines.

The prospecting work to date was backed by a mineral resource model derived from a magnetic survey and over 300 surface and core seabed samples.

In October 2009 Trans-Tasman said a partial magnetic survey covering a small portion of its tenements and a 3D resource model built by Fugro Geophysics defined potential mineral resource equivalent of over 360 million tonnes of titanomagnetite concentrate containing 60% iron.

However because the Fugro model was based on the magnetic properties of magnetite, if the adjustment is made for the less magnetic titano-magnetite, the economically recoverable mineral resource is estimated to be equivalent to 1,217 million tonnes of concentrate @ 60% Fe.

Trans-Tasman said this potentially recoverable resource is sufficient to support an offshore mining operation of 30 million tonnes a year of concentrate.

Trans-Tasman technical director Paul Vermeulen, in a talk given to the Steel Business Briefing in Shanghai in 2009, said Trans-Tasman has estimated the ultimate potential of the mineral resources to circa 9 billion tonnes of ore containing 60 % Fe in the southern section of its permit, offshore south Taranaki-Wanganui area.

Mr Vermeulen said these resources were based on a total high ironsands content area of 1,800 sq km containing 20 m deep sand at an average 12% ironsand concentration.

The largest North Island onshore resource of ironsands reported to date is at the Taharoa titanomagnetite export mine, near Kawhia, which was was estimated in 2002 to contain reserves of 184 million tonne containing 44 million tonne of concentrate.

Trans-Tasman Resources Ltd, which has offices in Perth and near Wellington, holds one Prospecting Permit 50383 covering 6,300 sq km of seabed in two quite separate areas. The southern section lies off southern Taranaki and Wanganui as far as the Rangitikei River and the northern section from the mouth of the Waikato River, south west of Auckland to the Mokau River in north Taranaki.

The company has also applied for another prospecting permit further offshore from south Taranaki-Wanganui.

Trans-Tasman Resources said the iron sand is located in easily dredgeable areas and in shallow waters (between 20 and 40 m deep) with no overburden and the most attractive deposits are located far offshore.

The highest concentration areas are typically close to the surface and the sands typically go down 60 m under the seabed. Some oil and gas wells off south Taranaki have found columns of ironsand up to 140 metres deep.

Trans-Tasman’s magnetic survey offshore from Patea in south Taranaki shows that the main geological targets will be paleo rivers, paleo beach heads formed when sea levels were lower than today.

The company is considering an offshore dredge mining operation combined with an offshore concentration plant located on a fixed rig or alternatively operating a large combined dredging and processing vessel.

Trans-Tasman Resources said iron sands would be dredged from the seabed, processed in an off shore beneficiation plant, then slurried to a Cape size vessel for shipment direct to Asia, or shuttled to a dedicated local onshore steel mill.

Denham Capital director and head of metals and mining Bert Koth said Trans-Tasman’s operating and capital costs will be a fraction of those for land-based iron ore mining. Its transport logistics would also suffer none of the constraints and costs faced by many, if not most, other iron ore projects.

“This is an exciting opportunity to make a valuable contribution to the development of New Zealand’s natural resources asset base,” Mr Koth said.

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