New York City, New York-based Iron Mining Group (IMG) announced that its wholly-owned subsidiary, Chile Inversiones de Minerales (CIM), has received the results of its initial 43-101 compliant drilling study on the "iron sands" portion of its Atacama Desert Iron Ore Mine property in the "iron belt" of Chile's Third Region, Atacama. The results of this drilling program provides the company with a best estimate projection of 40 million metric tons of recoverable high-grade iron ore solely within the iron sands portion of the Atacama Desert Iron Ore Mine. The drilling depth and iron content were used by the company to calculate the projected volume of sands within the property in order to determine its best estimation of recoverable iron ore contained therein.
More specifically, laboratory analysis of the core samples indicated that average iron content is between 3.5 to 6.5 percent, depending on location, and an average depth of 21 meters along the valley center. Due to the inverse conical shape of the valley, the total volume of iron sands on the property is based on an average depth of eight meters throughout, which is approximately 40 percent of the depth at the valley center. Accordingly, it is highly estimated that the property contains approximately 512 million metric tons of unrefined iron sands. At an estimated average iron content of five percent, it is projected that these iron sands can be processed to recover approximately 40 million metric tons of "64.5 percent Fe" iron ore, meeting the needs of the most discerning market buyers and the stipulations of IMG's existing Chinese sales contracts. Based on current CIF prices above $140 per metric ton, the total value of these iron sands deposits is currently greater than USD $5.6 billion.
Additionally, based on preliminary magnetic imaging surveys, the property's more than 10,000 acres of unexplored mountains are believed to contain a substantial additional quantity of recoverable iron ore beginning at the surface and continuing downward deep into the mountains within venous bedrock formations. CIM will conduct additional drilling to further confirm the presence and quantity of recoverable iron ore and other valuable minerals within these formations in its mountainous areas and outline a strategy for the continued development of this mining property.
"When we initially acquired these concessions, it was with a belief that the property contained a minimum of 20 million metric tons of iron ore collectively across the iron sands and mountainous bedrock formations," said Chairman and CEO, Garrett K. Krause. "Having tested only the iron sands at this stage and receiving indications of such substantial iron ore deposits, we are extremely pleased and feel validated in our strategy up to this point. We remain committed to the continued exploration and development of the overall Atacama Desert Iron Ore Mine property, with plans to enter initial production and begin shipping from this property in 2011."