17 Mar 2010 18:14

Severstal JV in Liberia plans resource definition drill program at Putu iron ore field in Q2 2010

MOSCOW. March 17 (Interfax) - African Aura Mining Inc. and Russia's Severstal Resource are finalizing the terms with the Liberian authorities for a 25-year concession to develop the Putu Range iron ore field and plan to continue drilling in order to define resources during the second quarter of 2010, the Toronto-listed African Aura said in a statement.

The results of drill core samples dispatched for metallurgical test work are due in the first half of 2010.

"The Putu project currently has a resource of 1.08 billion tonnes at 37.6% Fe defined from 2.6km of project's 12km strike. It is moving towards the pre-feasibility stage, with an intensive 60,000m resource expansion drilling campaign planned to commence in 2Q 2010. A pre-feasibility study is expected to be completed during 2012 with a definitive feasibility study expected 18 months thereafter," the statement says.

The Putu iron ore project is a 12km long iron rich ridge, located only 120km inland from the deepwater shoreline of eastern Liberia. In 2009, the Company announced an Independent Mineral Resource of 1.08 billion tonnes of iron ore at 37.6% total iron (Fe) from drilling undertaken on a 2.6km section of the ridge. The best drill results to date are 91m at 61.3% Fe oxidised BIF haematite and 232m at 40.8% Fe magnetite.

The deposit is being advanced in joint venture with Severstal Resources, which is currently investing US$30 million towards completion of a Pre-Feasibility Study in order to earn a 61.5% interest in the project, the statement says.

African Aura Mining was established in 2009 from a merger between African Aura Resources and Mano River Resources. Severstal owns 4.72% of African Aura.

Severstal Liberia Iron Ore Ltd holds the rights to the Putu range.

The Severstal steel group has assets in Russia, North America, Europe and Ukraine. The main beneficiary is the general director, Alexei Mordashov, with more than 82% of shares. About 18% are in free float.