High-grade iron ore extensions on the menu for CuFe drilling

CuFe has secured approval to start drilling at its Yarram iron ore project this month to test extensions of previous high-grade mineralisation and geophysical targets.

The exploration Mining Management Plan approved by the Northern Territory Department of Industry, Trade and Tourism also allows for the drilling of two undercover targets defined by detailed geophysical surveys along with diamond drilling and collection of bulk samples.

CuFe (ASX:CUF) is also continuing JWD mine operations with various cost and production initiatives assisting in maximising revenue and minimising costs.

JWD had achieved record production during the June quarter, allowing the company to load two cargoes with a total of 121,615wmt of iron ore.

Exciting times

Executive director Mark Hancock said Yarram was exciting to the company as there are so few high-grade iron ore projects which are close to available capacity at an established port in Australia.

“Covid restrictions impacted our ability to get our people on the ground and move the project along but with that now behind us we have made significant progress in recent months and look forward to drilling recommencing,” he added.

“With regards to our existing mining operations at JWD we are making some great inroads with the cost and efficiency of our operations.

“The iron ore price is tough for smaller miners at present so we are fortunate at CuFe to have a team that is very experienced in dealing with price volatility and can calmly manage through the process.

“Our focus at present is to preserve cash and tonnes during the downtimes so as to maximise our ability to participate in the upside when the market turns.”

Yarram exploration

CuFe, which holds a 50% interest in Gold Valley Iron and Manganese – the owner of the iron ore rights over the Yarram project, received approval for three streams of work.

The first is the drilling of extensions of high grade, massive hematite lenses that run across ML1163 which were identified by previous drilling campaigns and defined further by detailed mapping in July 2022 that confirmed the presence of massive outcropping hematite across the drill targets.

Approval has also been granted for the drilling of two undercover targets that have been defined by detailed geophysical surveys and sit 500m along strike from known high grade mineralisation.

The final stream of work is diamond drilling and the collection of bulk samples to determine metallurgical properties and the potential to upgrade lower grade material which has been identified in historical drilling.

JWD iron ore production

The company has also been continuing iron ore production operations at its 60%-owned JWD project with monthly shipments of high grade lump product delivered for each of the past four months under the previously announced sales contract to a South East Asian steel mill.

For its August and September shipments it entered an agency arrangement with Gold Valley Iron Ore, allowing the company to jointly ship tonnes from the neighbouring C4 project with JWD product, so that shipment volumes can be maintained while reducing the Company’s exposure to the iron ore price while the headline index price is depressed.

CuFe has also recut its JWD mine plan to reduce near term waste movement, thus reducing total mining costs.

This along with a reduction in sea freight cost and the company’s iron ore price hedge coverage, which remains in place for the majority of its proposed September and October shipment volumes, have allowed operations to continue economically.

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This article was developed in collaboration with CuFe (ASX:CUF), a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.