Updated resource fails to lift Cerro Resources

A new resource estimate for the Mt. Philp haematite iron prospect in Australia shifts more inferred resources into the indicated category but has failed to lift the shares of Cerro Resources (CJO-V, CJO-A).

Indicated resources-which now make up 63% of the total resource of the Mt. Philp deposit-currently stand at 19 million tonnes averaging 41% iron and 38% silica. Inferred resources add another 11.4 million tonnes averaging 34% iron and 48% silica.

The updated resource figures were based on forty-eight diamond and reverse circulation holes drilled over a strike length of four kilometres.

The 100%-owned Mount Philp deposit is about 54 km southeast of Mount Isa in Queensland and 8 km northwest of the company’s Kalman molybdenum-rhenium-copper-gold deposit.

Mt. Philp occurs as a single north-northeast trending iron-rich stratigraphic unit that extends over 4 km within the proterozoic corella formation that grades from haematitic quartzite through banded siliceous ironstone and siliceous ironstone into massive haematitic ironstone.

The ironstone is generally fine to medium grained with increasing grain size related to haematite content. Remobilization of haematite with coarse recrystalization is evident in the vicinity of some shears.

Preliminary metallurgical testing on samples from within the inferred resource model suggested the ability to produce a 68% iron product using the flotation method to remove silica. Flotation sighter tests on samples of varying silica content indicated that the production of a final iron ore grade product is achievable from high silica content material, the company says.

Cerro Resources started exploring the Mt. Isa mineral province in 2005 and focused on structurally controlled deposits within altered Corella formation meta-sediments. It discovered the Kalman molybdenum-rhenium deposit in October 2005 while deep drilling a known copper occurrence. It didn’t start pursuing the Mt Philp iron ore project with regional mapping and rock-chip geochemisty until 2010.

At presstime in Toronto shares of Cerro Resources were trading at 13¢ apiece within a 52-week range of 9¢-37¢. The company has about 208 million shares, fully diluted.