Parker Range Iron Ore Project

Cazaly continued work on the Parker Range Pre-Feasibility Study (PFS) and results were released shortly after the end of December. Development work had been ongoing. The Parker Range Project lies approximately 15 kilometres south-east of Marvel Loch and approximately 63 kilometres by road south of the Perth–Kalgoorlie railway. 

The PFS indicated very robust economics for the project which greatly benefited from its close location to existing and accessible infrastructure including road, rail, port, power and township. This access allowed for the relatively rapid development and ramp up to planned full production of 4 Mtpa within 1.5 years. A Definitive Feasibility Study (DFS) into the project commenced following these results, the initial phase of which incorporated a bridging programme of further metallurgical testwork. 

The PFS study showed that the Company was on track to become the second major iron ore producer in the Yilgarn region of Western Australia, behind Koolyanobbing Operations who had successfully operated in the region for many years. 

The study also highlighted Kwinana as the preferred export port over Esperance due to its closer proximity and lower capital costs requirements.

Hamersley Project

A total of 9 drill holes were completed for 1,332m at the Winmar Deposit , located approximately 70km north of the township of Tom Price. The Winmar Deposit is a Channel Iron Deposit (CID) target buried by modern alluvial drainage. Drilling tested extensions to mineralisation discovered in late 2008 as well as infilling previous drilling to determine mineralisation continuity. 

Numerous significant results were returned with a best result of 60m @ 55.6% Fe. Mineralisation has been intersected over a strike of 1km and is open in all directions. A small number of holes have also intersected bedrock mineralisation (BID) beneath the CID providing additional scope for resources. 

The conclusion of drill programmes enabled the Company to estimate the maiden Inferred Resource for the Winmar Deposit.

Earaheedy Iron Ore Project 

The Company combined its tenement holdings in the Earaheedy Basin located in the central region of Western Australia to form a 50/50 joint venture with Vector Resources Limited (ASX: VEC) to principally explore for iron ore and manganese mineralisation. The project covered a very large area in excess of 2,300 km2 including a substantial strike extent of the iron ore prospective Frere Formation. Numerous targets had been identified and the company was negotiating access to the tenements with the traditional owners. 

The Earaheedy Basin was first explored for iron ore during the 1970’s, principally by BHP and AMAX Exploration, who defined extensive areas of haematite enrichment with surface grades of up to 66% Fe. Subsequent work was very limited and only minimal drilling was conducted before work was discontinued. Recent work however, by the Geological Survey of Western Australia and by other companies, reinvigorated exploration and highlighted the potential of the region to host major iron ore deposits. The discovery of high-grade manganese mineralisation by Zinc Co Australia within the Earaheedy has also recently highlighted the potential of the region. 

Whilst the project was at an early stage of development, the extent of known iron formations within the host Frere Formation, the results from regional surface sampling and the results from other work in the region highlighted the great potential of the project to host several large-scale deposits of haematite, haematite-goethite and magnetite.

West Kalgoorlie Project 

Cazaly sold its interest in the West Kalgoorlie project and its wholly owned subsidiary, Hayes Mining Pty Ltd to Phoenix Gold Ltd who listed on the ASX on 22nd December 2010. As consideration for the sale, Cazaly received $1.7m in cash, and shares to the value of $1.8m in Phoenix. In addition, Cazaly would receive $2.5m in cash upon completion of drilling and gold production milestones. 

Peripheral Projects 

During the period, the Company divested a number of projects for cash and share consideration, including: 

The Company retained several free-carried interests in joint ventures managed by third parties. The Company retained expenditure free exposure to exploration success.