JV partners wait on test pit results

BC Iron and Fortescue Metals Group fast track test pit following completion of the Nullagine Iron Ore Project Feasibility Study.

Australian iron ore junior BC Iron (BCI) has received in-principle endorsement from Fortescue Metals Group (FMG) for the Company’s recently completed Feasibility Study on its Nullagine Iron Ore Project, located in the Pilbara Region of Western Australia.

The Study confirmed that the Nullagine Project is an economically and technically robust Direct Shipping Ore (DSO) project based on a Probable Ore Reserve of 36 Mt at 56.9% Fe, according to BCI.

The Nullagine Project will commence production at an initial rate of 1.5 Mtpa, subsequently ramping up to 3 Mtpa and then 5 Mtpa as roads and infrastructure are upgraded.

According to a BCI statement released this morning, the Heads of Agreement between BC Iron and FMG of 4 June 2009 contemplated a decision on the joint venture being made within 14 days of BC Iron delivering the Study to FMG.

The parties have agreed to vary that arrangement to facilitate completion of a bulk sample test pit.

A formal decision on the Joint Venture will be made following the outcome of the test pit.

“Following a review of the completed Feasibility Study, FMG and BC Iron have made the decision to fast-track one of the key recommendations in the Study — the completion of a 120,000 t bulk sample test pit,” BCI’s statement read.

“Mining of the test pit is expected to commence in September with mining completed by the end of September.

“Ore will be crushed, screened and stockpiled for use in test work as well as to provide samples to be used for marketing purposes.

“The ore will then be used for initial commissioning of the Nullagine Project upon commencement of operations in the first half of 2010.”

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