Aurumin Limited has initiated a 2,000m drilling campaign at its Central Sandstone Project targeting high-grade iron ore, advancing a potential $7 million joint venture with Newcam Mineral Pty Ltd. This move aims to unlock significant value from a promising iron ore district with grades up to 67% Fe.
- Drilling commenced on 54 holes totaling approximately 2,000 meters
- Targets high-grade iron ore with rock-chip assays up to 67% Fe
- Newcam to fund 50% of drilling under a potential $7 million JV
- Project infrastructure includes a 500ktpa CIL processing plant needing refurbishment
- Exploration focuses on granted mining leases with multiple priority targets
Drilling Begins at Central Sandstone
Aurumin Limited (ASX: AUN) has officially commenced a significant reverse circulation (RC) drilling program at its Central Sandstone Project, located 520 kilometers northeast of Perth. This campaign, comprising 54 planned holes over an estimated 2,000 meters, targets high-grade iron ore mineralisation identified in previous surface mapping and rock-chip sampling.
The drilling marks a critical phase in the due diligence process under an exclusive option agreement with Newcam Mineral Pty Ltd, a private iron ore operator with established export infrastructure in Western Australia. Newcam’s decision to exercise its option to form a joint venture hinges on the results of this program, which could unlock up to $7 million in project funding.
High-Grade Iron Ore Potential
Exploration at Central Sandstone has revealed a discontinuous strike length exceeding 6 kilometers of banded iron formations (BIF) enriched with hematite and goethite. Rock-chip assays have returned grades as high as 67% iron (Fe), with the majority exceeding 60% Fe, indicating strong potential for Direct Shipping Ore (DSO), a highly sought-after commodity in the iron ore market.
The project area includes three granted mining leases (M57/654, M57/128, and M57/129) and existing infrastructure such as a 500ktpa carbon-in-leach (CIL) processing plant, albeit requiring refurbishment, along with a permitted tailings storage facility, bore field, and camp facilities. These assets provide a foundation to accelerate development should the joint venture proceed.
Strategic Partnership with Newcam
Newcam’s involvement is pivotal, bringing not only funding but also logistical advantages. The company operates iron ore mines in the Mid-West region and has long-term leases for bulk storage and port access at Geraldton, approximately 495 kilometers west of Sandstone. This proximity to established export routes reduces transportation risks and costs, enhancing the project's commercial viability.
Under the agreement, Newcam will fund 50% of the mutually agreed drilling program, sharing exploration risk and aligning interests. Aurumin’s Managing Director, Daniel Raihani, emphasised that the joint venture structure preserves upside potential for Aurumin shareholders compared to a royalty-only deal, while accelerating project advancement and de-risking the iron ore opportunity.
Exploration Targets and Geological Context
The drilling program prioritises seven key targets identified through detailed geological mapping and sampling. These include northern, central, and southern zones characterised by folded BIF ridges with widths up to 40 meters and strike lengths ranging from hundreds of meters to over a kilometer. The targets exhibit shallow dipping banded iron, high-grade hematite, and proximity to existing infrastructure, all favorable for open-pit mining.
Systematic re-assaying of historical drill pulps is also planned to refine the understanding of mineralisation continuity and grade distribution. The flexibility in drilling depths, nominally up to 80 meters, allows for adjustment based on mineralisation encountered, aiming to delineate economically viable ore bodies.
Broader Context and Future Outlook
The Central Sandstone Project complements Aurumin’s broader portfolio, which includes significant gold resources and other iron ore prospects in Western Australia. The company’s strategy to develop both gold and iron ore assets in parallel could diversify revenue streams and enhance shareholder value.
As the drilling progresses over the coming weeks, market participants will closely watch assay results and the potential formalisation of the joint venture with Newcam. Success here could position Aurumin as a notable player in the Mid-West iron ore sector, leveraging existing regional infrastructure and a proven geological setting.
Bottom Line?
Aurumin’s drilling campaign and potential $7 million JV with Newcam could transform Sandstone into a strategic iron ore asset, but results will be key to unlocking value.
Questions in the middle?
- Will the drilling confirm sufficient continuity and scale of high-grade iron ore to justify development?
- How will the refurbishment needs of the existing processing plant impact project timelines and costs?
- What are the terms and timing for Newcam’s decision to exercise the joint venture option?