August 7th (Steel Guru) – Money control.com reported that state owned mining firm NMDC is in talks with Rio Tinto for a 50:50 JV which would bid for global mining assets.

Mr Rana Som CMD of NMDC said that “We are in discussion for a 50:50 joint venture. Rio Tinto was one of the international parties to evince interest in establishing a joint venture when we floated a tender.”

Earlier this year, as many as 35 companies had expressed interest in NMDC’s global tender for floating a joint venture for mining activities. Out of which six were foreign companies.

A Rio Tinto spokesperson said that “Rio Tinto does not comment on market rumor or speculation.”

As per report, the JV besides acquisition of global assets, the partnership could be extended to new assets in the domestic market also. Industry sources said that the partnership could enhance the global mining giant Rio Tinto’s presence in the domestic market significantly.

Like Rio Tinto, NMDC is also involved in the exploration and mining of a wide range of minerals. Also, in the domestic market, NMDC has filed mining applications for iron ore and coal in almost all the mineral rich states. If the discussions with Rio Tinto get through, it would be the domestic miner’s second joint venture company.

Mr Som said that the two joint venture companies would bid for different assets in different countries. NMDC and the Spice Energy group have formed a joint working group, which is conducting due diligence of some assets, including two iron ore deposits in Armenia, which may require an investment of USD 500 million.

August 7th (Steel Guru) – Rio Tinto said that it would fight for its right to continue developing a world class iron ore project in Guinea, after the country’s president appeared to rescind the concession.

Mr Sam Walsh head of Rio’s iron ore division said that “This is a matter that is under very heavy discussion between us and our joint venture partners, the World Bank. We are in the midst of discussions. We will fight for our rights.”

Mr Walsh denied reports the Guinean government had accused Rio of developing a monopoly on all iron ore resources of the Simandou region, saying this was simply not true. He said Rio’s project comprised only 18% of the deposits of the Simandou range.

Rio has already spent USD 300 million developing the Simandou iron ore project, which is without doubt, the top undeveloped tier one iron ore asset in the world. Rio had planned to start mining at Simandou by 2013, but in June 2008 received a letter from the president’s office questioning the validity of its Simandou concession. Rio remains on site and said it was confident that its arrangements are in all respects in conformity with Guinean laws and that it has complied with its obligations.

Simandou is a prominent component of the list of growth projects Rio is using in its defense against a hostile USD 170 billion takeover bid from BHP Billiton. Building the mine and the railway needed to transport the iron ore to Guinea’s coast is expected to cost USD 6 billion. The project could eventually produce up to 170 million tonnes of iron ore a year.

August 7th (Steel Guru) – BNamericas reported that Australia’s Strike Resources along with Apurímac Ferrum and two other Peruvian partners are planning to launch a 20 million tonnes per annum iron ore mine in Peru in mid 2012.

A recent pre feasibility study on the project in south central Peru’s Apurímac department laid out a USD 2.6 billion CAPEX, 15 year mine life and 20 million tonnes per annum production, making it the largest iron ore mine in Peru.

But before a positive final feasibility study can be carried out for the mine, it must increase the roughly 172 million tonnes of inferred resources grading 62.3% iron ore to at least 300 million tonnes and upgrade the category of mineralization.

Mr Federico Schwalb GM of Apurímac Ferrum said that the study contemplates construction of an open pit, processing plant, a port and a roughly 360 kilometers long pipeline to transport the product from the mine to the port. He added that the companies involved are also considering transporting the product by train.

In addition, the project’s partners are involved in a dispute concerning their respective stakes in the property, but which does not impact Apurímac Ferrum and also is not obstructing the advance of the project.

Strike Resources is also involved with Apurímac Ferrum in a project in Cuzco department, which is at a conceptual stage, although exploration is being carried out. Presently Shougang Hierro Perú, which operates in Ica department, is the country’s only iron ore producer. Shougang sold 7.71 million tonnes of iron ore in 2007 and is planning to double capacity to 16 million tonnes per annum by mid 2010.

August 7th (Steel Guru) – It is reported that the Kudremukh Iron Ore Company Limited has created a railway unloading facility at the marshalling yard of New Mangalore Port Trust.

Mr K Ranganath C MD of KIOCL said that the company has laid exclusive railway lines for handling iron ore brought from Bellary by rail rakes.

He said that “We are expecting to get at least 2 or 3 rakes of 3,000 tonnes each a day. Presently railway wagons are moving through Konkan railway facilities.”

August 7th (The Sydney Morning Herald) – Atlas Iron Ltd has entered into a joint-venture agreement with Fortescue Metals Group Ltd (FMG) for Atlas’s Abydos project in Western Australia’s Pilbara region.

The joint venture covers a tenement over which Atlas owns the iron ore rights. Atlas also said that it was the first company to seal a port access deal with Fortescue for its new Port Hedland iron ore export terminal. “The primary focus of the joint venture is to define and develop extensions to the FMG Glacial Valley magnetite deposit, (part of the Abydos project)” Atlas said in a statement.

“FMG may earn a 60 per cent joint-venture interest in the iron ore rights by delineating inferred resources of iron ore within the tenement,” Atlas said. It also said FMG may earn a further 15 per cent joint venture interest in the iron ore rights by completing a pre-feasibility study on the mining of iron ore within the tenement.

A further 12.5 per cent joint venture interest may be earned in the iron ore rights by completing a definitive feasibility study on the mining of iron ore within the tenement. Atlas has converted a memorandum of understanding (MOU) into a binding heads of agreement to use Fortescue’s port facilities for the initial period of production from its flagship Pardoo project, about 100km from Port Hedland.

Pardoo commences production in October, with exports to follow in December.

“This is a ground-breaking third-party port access agreement, the first of its kind in Western Australia,” Atlas managing director David Flanagan said. “We now look forward to building on our association with FMG as we commence development of our second iron ore project, 120km south of Port Hedland at Abydos.”

Atlas is expected to negotiate a rail haulage agreement with FMG to transport ore from Abydos to port. It is also likely to use road haulage to get its product from Pardoo to port. Mr Flanagan flew from the Diggers and Dealers Conference in the mining town of Kalgoorlie to Perth to finalise the negotiations. He returned to the popular conference to make a presentation.

He told delegates that Atlas had not yet committed to offtake agreements because it planned to sell about 60 per cent of product on the spot market to capitalise on high prices. “Every other day we receive an offer … with a base case that we would achieve a premium to the benchmark price,” he said.

He said Atlas was spending between $1.2 million and $1.5 million on exploration each week. The only other company that has an MOU with Fortescue is BC Iron Ltd.

August 7th (Bloomberg) – Cia. Vale do Rio Doce, the world’s biggest iron-ore producer, said second-quarter profit climbed 22 percent to the highest ever on record contract prices for supplies sold to steel producers.

Net income rose to $5.01 billion, or $1.02 a share, from $4.095 billion, or 85 cents, a year earlier, Rio de Janeiro-based Vale said today in a statement posted on the Brazilian security regulator’s Web site. The results topped the average estimate of 91 cents a share from eight analysts surveyed by Bloomberg News.

Sales surged 22 percent after Vale won annual price increases of at least 65 percent in supply contracts for iron ore, which accounted for more than half of sales in the quarter. Still, profit was eroded as the average price of nickel, the company’s second-biggest source of revenue, fell 43 percent from a year earlier.

“The market is in a buying mood after this result,” said Daniel Gorayeb, an analyst at Spinelli SA in Sao Paulo. “The company managed to take advantage of market demands by producing more of its higher-value products and focused more on what was of interest, which conveys a positive image.”

Analysts’ Estimates

Vale, led by Chief Executive Officer Roger Agnelli, is spending $59 billion in the five years through 2012 to increase iron-ore capacity by 40 percent to 450 million metric tons a year and double nickel and copper production. Vale raised $12.1 billion in a July share sale, the biggest ever by a Brazilian company, to fund expansion and acquisitions.

The value of Vale’s iron-ore sales climbed 72 percent to $6.12 billion in the quarter, while nickel plunged 41 percent to $1.87 billion.

Vale this year negotiated a sixth annual increase in contract prices for its iron ore, the main raw material used to make steel. Nickel for delivery in three months averaged $25,919.69 a metric ton on the London Metal Exchange during the quarter, down 43 percent from a year earlier.

Vale said profitability at its nickel operations are high because the company is a low-cost producer.

“In the medium term, the combination of a reduced level of stainless-steel stockpiles and a drop in nickel inventories creates a favorable environment for the strong recovery of prices of the metal,” Vale said in the statement.

Copper, Coal

Agnelli is seeking to expand in coal and copper as quarterly profit growth slowed from a 69 percent average in the past four years. In May, Agnelli told business leaders in Rio de Janeiro that “if Vale doesn’t grow, it will be swallowed.”

Net revenue rose to $10.6 billion from $8.69 billion in the second quarter of 2007. Vale was expected to post sales of $11.8 billion, the average of four estimates compiled by Bloomberg.

The results are based on generally accepted accounting principles in the U.S.

Based on Brazilian accounting standards, profit fell 22 percent as a weaker dollar eroded the value of exports when converted back into the local currency. Net income fell to 4.57 billion reais ($2.9 billion), or 94 centavos a share, from 5.84 billion reais, or 1.21 reais a share, a year earlier, Vale said in a statement on its Web site. Sales climbed 3 percent to 18.3 billion reais.

Most of Vale’s sales are priced in dollars. The U.S. currency fell 17 percent against the Brazilian real in the 12 months through the end of the second quarter.

Vale’s American depositary receipts gained 2.3 percent to $27.30 at 7:21 p.m. in after-hours trading in New York.

In regular Sao Paulo trading, Vale rose 1.9 percent to 36.71 reais. The stock has declined 28 percent this year, compared with a 9.9 percent drop for Brazil’s Bovespa stock index.

August 4th (Mineweb) – Gindalbie Metals Limited (ASX: GBG – “Gindalbie”) is pleased to announce a further substantial increase in the magnetite resource for its Karara Iron Ore Project in Western Australia to 1.853 billion tonnes grading 35.4% Fe.  

In addition, a revised Probable Ore Reserve, taking in an updated pit design containing 522 million tonnes grading 36.3% Fe is also announced.

The revised Mineral Resource and Ore Reserve inventory confirms the status of Karara as one of the largest undeveloped orebodies in Australia, capable of supporting a world-class, long-life operation. 

The total Indicated and Inferred Resource as at August 2008 represents a doubling of the previously announced Indicated and Inferred Resource of 929 million tonnes at 36.3% Fe announced in September 2007.

It is important to note the revised Ore Reserve is contained within a pit designed around the original project start up parameters of producing 8 million tonnes per annum (Mtpa) of high grade magnetite concentrate over a 25-year period. Gindalbie has now started work on a new pit design to define larger ore reserves to support increased production levels such as the proposed expanded production rate of 12Mtpa currently being studied.  

The updated Mineral Resource inventory follows the completion of over 31,300 metres of drilling in 223 drill holes. Sampling included 15,652 Head Assays and 5,541 DTR Assays.

The drilling has continued to demonstrate the robustness, consistent grade and quality of the magnetite orebody at Karara, which is being developed by Gindalbie and its 50% joint venture partner Anshan Iron & Steel Group Corporation (“AnSteel”). The substantial increase in the Resource is in large part due to depth extensions, with most of the resource model now extending to a depth of 600 metres below surface (previously 350 metres depth). Importantly, the 1.853 billion tonne resource is in excess of 75% in the Indicated category.  

This update represents the fourth increase in the Mineral Resource inventory for the magnetite deposit at Karara since exploration commenced in May 2005. In addition, recent drilling and ground survey work has confirmed the potential for further significant additions to the resource inventory, confirming the continuity of the deposit along strike.

The updated Mineral Resource estimate was calculated by CSA Consultants and is set out in Table 1 below:  

Table 1:     August 2008 Karara Magnetite Deposit: Resource Classification
Resource Classification Mt Fe % SiO2 % Al2O3 % P % LOI %
Indicated 1,417 35.5 43.2 1.25 0.09 -0.58
Inferred 437 35.1 43.9 1.44 0.09 -0.71
             
Sub Total 1,853 35.4 43.3 1.29 0.09 -0.61
Resources have been estimated for Oxide, Transitional and Fresh material separately. Material types have been combined in Table 1.

Resources are reported exclusive of Reserves defined within the July 2008 Open Pit design.

 

Reporting of Resources and Reserves is compliant with the standards and recommendations outlined in the Australasian Code for Reporting of Mineral Resources and Ore Reserves (2004), prepared by the Joint Ore Reserves Committee (JORC).

The remodeled open pit design consists of five stages of development, sequenced to minimize waste removal and produce consistent grade and volume of concentrate. The remodeled pit design contains 5% more Probable Reserve, produces 7% more concentrate and requires significantly less waste removal than the original September 2007 pit design. The waste to ore ratio has now fallen to 0.34:1 from the previous 0.42:1 in the September 2007 design. Importantly, the remodeled design has demonstrated the production schedule to be robust at mining rates of both 20Mtpa (8Mtpa concentrate) and 30Mtpa (12Mtpa concentrate).

Table 2:      Karara Magnetite Pit Tonnage  –   August 2008
Pit Design Mt Fe % SiO2 % Al2O3 % P % LOI %
Ore 522 36.3 42.8 0.82 0.09   -0.66
Concentrate 211 68.3 4.73 0.11 0.01   -2.86
Fresh and Transitional material classified as Probable Reserves.

 
Commenting on the announcement, Gindalbie’s Managing Director, Mr Garret Dixon, said the upgrade represented an outstanding result, improving all aspects of the previously announced Resource, Reserve, Concentrate and pit designs and confirming that Karara would deliver a long-term source of premium quality concentrate and pellets for Gindalbie’s joint venture partner, AnSteel. 

“We have now achieved four successive resource upgrades for Karara within the space of three years, with the Indicated and Inferred Resource doubling again from the previous resource as at September 2007 to the current level of 1.85 billion tonnes,” Mr Dixon said.  

“In addition, we have now defined an Ore Reserve over and above these Indicated and Inferred Resources of greater than half a billion tonnes,” he said. “This demonstrates clearly that Karara will sustain a long-life operation at the expanded 12Mtpa production rate currently being examined, as well as potential future expansions above this production level. 

“The revised Mineral Resource and Ore Reserve inventory would support over a 100-year plus mine life at the 8Mtpa production rate currently contemplated and 75 plus years at the expanded 12Mtpa production rate,” Mr Dixon added.

“The more work we do on this deposit, the better it is found to be. There has been improvement even in parameters such as the waste to ore strip ratio which means a corresponding reduction in mining costs. It is also worth noting that, based on the conversion and concentrate production parameters achieved, the revised resource and reserve equates to over 900 million tonnes of high-grade magnetite concentrate grading over 68% Fe – making this deposit equivalent to or better than some of the biggest hematite deposits in terms of potential iron ore product production in the world,” he said.

– ENDS – 

Released by: On behalf of:
Nicholas Read

Read Corporate

Mr Garret Dixon/Mr Michael Weir

Managing Director/Investor Relations Manager

Telephone: (+61-8) 9388-1474 Telephone: (+61-8) 9480-8700
Mobile: (+61-8) 419 929 046 www.gindalbie.com.au

About Gindalbie Metals Ltd (ASX: GBG)

Gindalbie is well advanced towards achieving its vision of becoming a leading independent Australian iron ore company with a diversified portfolio of magnetite and hematite production assets, located in the Mid West region of Western Australia

The initial focus of Gindalbie’s growth strategy is the Karara Iron Ore Project, located 225km east of Geraldton, where it will deliver initial production of Direct Shipping Ore (DSO) hematite in 2009 to be followed by production of high grade magnetite concentrate and blast furnace quality pellets in 2010. Karara is being developed through a 50:50 Joint Venture with Ansteel, one of China‘s leading steel and iron ore producers.

Gindalbie’s longer term growth will be propelled by the exploration and development of its extensive 1,900 sq km tenement portfolio, which includes numerous prospective magnetite and hematite exploration targets expected to deliver a long-term pipeline of growth opportunities.