IMX Resources ready to rock

June 17, 2008

June 17th (AdelaideNow) – IMX Resources says it expects to hit the ore body at its Cairn Hill iron ore project southeast of Coober Pedy this week.

The Perth-based company is finalising its mining and rehabilitation plan for the $40 million project, expecting to start full-scale mining in the third quarter.

From early 2009, IMX will mine 7.1 million tonnes of ore from two pits at Cairn Hill at a rate of 1.2-1.4 million tonnes per year.

The company started trial mining about two weeks ago, in order to produce 20,000 tonnes of ore for bulk sampling.

Managing director Duncan McBain said the first phase of mining was about getting early cash flow, with a second and third phase planned.

“Our pits here have been designed to maximise early cash flow,” Mr McBain said.

IMX was aiming to add another 750,000 tonnes per year of exports in phase two by 2010, with phase three targeting an expansion to 3-5 million tonnes per year within five years.

Mr McBain said by this stage the company hoped to be able to export its product through an SA port such as Port Bonython, northeast of Whyalla, which is currently being assessed for its viability as a bulk commodity export facility.

Only about 10 per cent of a 40km trend which hosted the phase-one pits had been drill-tested so far.

The company plans to export magnetite iron ore with a grade of about 54 per cent, along with small amounts of copper and gold.

The ore would be hauled by road to the Adelaide-to-Darwin railway, where it would be railed to Darwin for export to China.

Once in China it would be upgraded to a product with a concentration of greater than 70 per cent.
“This is a premium product in the Chinese market,” Mr McBain said.

“A lot of people are shipping 60, 58 per cent. What that’s doing to the steel mills is it drops the blast furnace productivity.”

“Our product allows people to regain some of the productivity they are losing by buying all these other ores.”

IMX has a three-year off-take agreement with Chinese company Tonghua Mining, which invested almost $14 million in IMX in February for a 9.95 per cent stake in the company.

Mr McBain said the project’s proximity to Coober Pedy and the Adelaide-to-Darwin railway line was a bonus.

“We have pretty good infrastructure considering we are in a reasonably remote location,” he said.

“Coober Pedy’s very important to us . . . it’s a community where people are used to doing mining which is a big advantage.”

Mr McBain said it would be basing its 60-person workforce at Coober Pedy which was within driving distance of the mine.

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