Iron rules U New ideas in where and how to mine and
Transcription
Iron rules U New ideas in where and how to mine and
Document1 2/9/08 3:24 pm Page 1 IRON ORE Iron rules New ideas in where and how to mine and recover iron examined by John Chadwick U ntil recently, iron ore mining has generally been the preserve of large compnaies that can afford to install large-scale infrastructure. Today, however, the iron ore landscape is changing with smaller mining companies getting very active and new locations becoming important. For example, Ralph Rushton, a Director of Northland Resources, explains “what we've been seeing over the last year with Northland is a new appreciation within the mining and financing community for exploration and development in stable and totally transparent countries, in our case Finland and Sweden. Given the on going paranoia about resource nationalisation, what was a negative a few years back (both countries being regarded as somehow socialist and therefore antiinvestment) is now a positive.” As he says, “we're not exploring the Brazilian or Australian style mega deposits with direct shipping ore, but 30 International Mining SEPTEMBER 2008 then again, we're not hampered by the need for huge infrastructure investments which means we can focus on smaller systems.” The “smaller systems” are certainly a trend being seen in many iron ore provinces around the world, including Australia, Canada and India. Rushton also notes, “we’re looking at medium sized magnetite deposits that are Bateman APIC jigs are seeing more application in iron ore. This picture shows Nava Bharat's jig producing ferrochrome near Meramandali in Orissa, India located within European markets. The Swedes already mine and process magnetite from Kiruna and Malmberget so the products are known and appreciated by the steel manufacturers and the technology has been largely developed locally.” Northland Resources recently announced the results of a NI 43-101 compliant Preliminary Economic Assessment for its three main magnetite projects: Tapuli and Stora Sahavaara in northern Sweden, and Hannukainen in northern Finland. In fact, these are iron ore-copper-gold (IOCG) deposits. The three projects in total deliver an NPV of €1.114 billion at a 10% discount rate (NPV10), Earnings Before Interest and Tax (EBIT) of €5.466 Billion and an IRR of 27%. Document1 2/9/08 3:24 pm Page 1 IRON ORE Table 1. Iron ore World production (Mt) Country 2002 2003 Sweden Sub-total Europe excl. CIS 20.3 24.4 21.5 25.3 Kazakhstan Russia Ukraine Sub-total CIS Sub-total Europe 15.4 84.2 58.9 158.6 182.9 Canada (1) USA Brazil Venezuela Sub-total Americas 2005 2006 2007 22.3 26.2 23.3 30.1 23.3 30.7 24.7 32.0 17.3 91.8 62.5 171.6 196.9 18.7 97.0 65.6 181.3 207.5 16.5 96.8 68.6 181.8 211.9 18.6 103.9 73.1 195.6 226.3 19.0 105.0 77.4 201.4 233.4 30.9 51.5 225.1 20.9 350.4 33.3 48.5 245.6 19.2 371.3 28.6 54.7 270.5 20.0 400.2 30.1 54.3 292.4 21.2 425.2 34.1 52.9 318.6 22.1 454.8 33.2 52.0 336.5 22.5 471.5 9.6 36.5 51.8 10.1 38.1 53.3 10.7 39.3 54.3 10.7 39.5 55.3 11.1 41.2 57.1 11.9 41.6 57.7 India Sub-total Asia excl. China 86.4 103.0 99.1 116.4 120.6 139.7 142.7 165.0 180.9 206.5 206.9 236.2 China (2) Sub-total Asia 108.8 211.8 122.7 239.1 145.7 285.5 200.3 362.7 276.4 482.9 332.3 568.5 Australia Sub-total Oceania 187.2 188.9 212.0 213.9 234.7 237.0 257.5 259.8 275.1 277.3 299.1 301.3 Total world 985.9 1074.5 1184.4 1314.9 1498.3 1632.5 Mauritania South Africa Sub-total Africa 2004 1) Shipments not production. 2) Iron ore production is converted, so that its iron content is about equal to that on average in the rest of the world. China ore production (unconverted): 231.4 261.1 310.1 426.2 588.2 707.1 Source: UNCTAD Trust Fund on iron ore information The key economic findings of the individual studies for each project, which were performed by Wardell Armstrong International (WAI), are: Tapuli – NPV10) of €141.5 million, EBIT of €456 million and an IRR of 43% with a payback period of four years. Estimated Capital Expenditures (capex) of €146.6 million for mine development and construction of the processing facility includes €17.6 million in contingency and €13.2 million in EPCM costs. Stora Sahavaara – NPV10 of €632.8 million, EBIT of €3,090 million and an IRR of 29% with a payback period of six years. Estimated capex of €258.2 million for mine and processing facilities and €279 million to build a 5 Mt/y pelletising facility includes €25.2 million in contingency and €21.6 million in EPCM. Hannukainen – NPV10 of €344.7 million, EBIT of €1,920 million and an IRR of 23% with 32 International Mining SEPTEMBER 2008 a payback period of five years. Estimated capex of €276.3 million for mine processing facilities and €279 million for construction of a 5 Mt/y pelletising facility includes €35.1 million in contingency and €33.6 million in EPCM. Furthermore, Northland has been drilling the Pellivuoma iron deposit, located about 15 km west of the Tapuli that it is fast-tracking to production. Early results suggest that Pellivuoma may contain a substantial tonnage of lowstripping ratio, open pittable magnetite resources within hauling distance of the proposed TapuliStora Sahavaara iron ore processing facility, which could significantly extend the life of the planned complex. Pellivuoma is a near-surface magnetite body hosting an historic resource of 43 Mt with an average grade of 32.7% Fe, 0.04% P, and 0.58% S to a depth of about 200 m below surface. Highlights of four holes for which assays have been returned include hole PEL08001 100.7 m @ 35.7% Fe from 11 m downhole and 94.5 m @ 39.7% Fe from 168 m downhole; and hole PEL08004 66.1 m @ 30.1% Fe from 15.4 m downhole. In July, the municipality of Pajala was awarded SEK7 million Swedish Krona by the European Union (EU) to investigate inter-community collaboration between the districts of Pajala in Sweden and Kolari in Finland. The project is in response to Northland's proposal to establish at least three producing iron ore operations in the border area. This investigation will focus on the resolution of issues such as planning and building the local and cross-border infrastructure needed to support the mining operations, for example roads, bridges and railroads. It will also investigate how to manage the large-scale workforce migration to the area which both municipalities are anticipating once Northland's projects reach the construction phase. The Local Authorities will be able to apply for more funding after the initial 18-month period. Northland President Buck Morrow said: "This funding is a very positive signal that the EU understands the significance for the Pajala and Kolari municipalities of the iron ore projects we're planning to develop and is prepared to support the projects with funding. I believe, as does the entire Board and management of Northland, that the projects are strategically important for Sweden, Finland and the EU and will have a lasting positive impact on the region." WAI concluded that all three advanced projects are robust and strongly positive in terms of NPV and IRR and having done so, Northland is looking at innovations in technologies, such as alternatives to truck haulage from the open pits once they deepen. Another technology being considered is to use AG mills for secondary crushing and grinding instead of installing highercost high presure grinding rolls and ball mills. If all of the currently envisaged mines reach their proposed production levels, Northland could have an output of 13 Mt/y, comprising of 3 Mt of iron ore concentrate from Tapuli, 5 Mt of blast furnace-grade pellets from Stora Sahavaara, and 5 Mt of direct reduction-grade pellets from Hannukainen. Tapuli is likely to be the first into production. Meanwhile in the Pilbara… In late July, Rio Tinto, through its Hamersley Iron subsidiary, and Iron Ore Holdings (IOH) agreed on commercial terms for an innovative minegate sales arrangement. Under the arrangement, Rio Tinto would purchase iron ore from a new IOH mine at Phil’s Creek, 90 km from Newman. Once the feasibility of developing the Phil’s Creek deposit is proven, the mine would be Document1 2/9/08 3:25 pm Page 1 IRON ORE owned and operated by IOH, and Rio Tinto would purchase the supplied iron ore and transport it for sale to its customers. IOH would deliver the ore to the Yandicoogina stockyard, where Rio Tinto would assume ownership. The mine would produce an estimated one to 1.5 Mt/y. Rio Tinto Iron Ore Chief Executive Sam Walsh said the agreement was an innovative solution that suited both parties. “This commercial agreement represents an excellent opportunity for Rio Tinto to gain access to extra tonnage, and importantly, in a way that does not jeopardise the efficiency of our fully integrated production system. It also enables IOH to develop a small resource that would face large capital costs on a stand-alone basis and most likely remain undeveloped.” “The output from this proposed mine is less than 1% of our total Pilbara production. With our exponential growth from 220 to 320 Mt/y and beyond, and infrastructure expansions possibly preceding mine supply, we can stockpile the ore to capitalise on rail and shipping opportunities as they arise. Importantly, it demonstrates our preferred alternative to the growing demands from government and industry for access to our rail infrastructure. The agreement is commercially-based and balances the risks for both parties,” Walsh said. The Phil’s Creek deposit comprises 8.3 Mt of JORC compliant Indicated mineral resources grading 58.1% Fe. The deposit is pisolite ore situated only 5 km from Rio Tinto’s Yandicoogina mine, the largest iron ore mine in Australia. Long time buyers of Pilbara iron ore, Chinese companies are now investing heavily in the region. Most recently, it was announced that Metso Minerals will supply minerals processing equipment, valued at some €53 million to China Metallurgical Group Corporation (MCC) for the Sino Iron project at Cape Preston, 100 km southwest of Karratha. The delivery will be completed during the first quarter of 2010. The order comprises 28 VPA pressure filters with complete automatic control systems and compressed air systems and 52 slurry pumps. The order also includes auxiliary equipment, parts, and supervision of erection and start-up. The order is so far the largest VPA pressure filter order received by Metso and it is estimated to be the largest mineral concentrate filtration plant in the world. The filter plant is designed to dewater up to 33 Mt/y of fine magnetite concentrate to a product with moisture suitable for shipment or pelletising plant feed. Citic Pacific Mining’s Sino Iron project is one of the largest mining projects in Australia. MCC is one of the largest equipment manufacturers in China and a leading Chinese contractor to the mining and metallurgical 34 International Mining SEPTEMBER 2008 Table 2. Corporate control in iron ore mining in 2007 Controlling entity Country 1 Cia Vale do Rio Doce 2 Rio Tinto plc 3 BHP Billiton Ltd 4 State of India (1) 5 Arcelor Mittal 6 Metalloinvest 7 Anglo American 8 Cleveland-Cliffs Inc 9 LKAB (State of Sweden) 10 Ferrominera (State of Venezuela) Total, 10 largest Total, World Brazil UK Australia India UK Russia South Africa USA Sweden Venezuela Controlled production (Mt) 308 144 120 55 e 51 e 40.9 32.4 31.2 24.7 22 e 829 1635 Share of Total world prod. (%) 18.8 8.8 7.3 3.4 3.1 2.5 2.0 1.9 1.5 1.4 50.7 100.0 Note: State of India includes SAIL, NMDC and others. Source: Raw Materials Data, www.rmg.se, Stockholm 2008. industries. This large-scale magnetite iron ore project, the first of its kind in Western Australia, is under development by CP Mining Management. It is bringing innovative, new mining processes to Australia and is the first iron ore project to include large scale downstream processing. The project has access to over 2,000 Mt of Measured, Indicated and Inferred magnetite ore and, when operational, will be one of the world’s largest mines. It will process produce 27.6 Mt/y of a mix of pellets and concentrate. Mining magnetite mining and adding value is much more intensive than the process required for the more traditionally mined hematite ore. Getting the ore out of the ground is the start of a more complex extraction process. Once it has Document1 2/9/08 3:26 pm Page 1 IRON ORE been extracted, it must go through a process to separate out and crush the magnetite into a concentrate – for direct export or for conversion into pellets. CP Mining will take delivery next year of Western Australia’s first ultra-class trucks – the new Terex Unit Rig MT 6300, 363 t payload units. Terex has a prototype MT 6300 AC electric drive truck operating in Canada’s oil sands, but the Sino Iron fleet will be the first production units working anywhere in the world. The project has ordered more than $120 million worth of Terex equipment, HighGrade reports, including ten of the MT 6300s, five MT 4400 AC-drive trucks, two RH400 face shovels, six MT3300 AC-drive service and water trucks, and six SKF 15 production drills. The first MT 6300 will arrive in Australia in April next year and the mine may eventually run a fleet of 14 of the vehicles as it ramps up its annual mining rate to 160 Mt. The first process stage is to feed the ore through a primary in-pit crusher. The crushed ore is then transported to a concentrator. Each of the eight mills in that will stand over 17 m high and be 12 m in diameter. The fine ore stream from the mills can be separated by magnetic separators to either concentrate or tailings. The SSP has real-time remote monitoring resulting concentrate will be thickened and stored before being pumped 25 km to the port, where it is to be filtered to reduce moisture. Around 75% of the concentrate will be shipped direct to China for blast furnacing, with the remainder being processed into pellets. CP Mining says the concentrate and pellets from Sino Iron will be a superior product for steel making because: ■ There is virtually no undesirable phosphorous ■ There is virtually no alumina, and no silica ■ Less energy is required to process magnetite into steel in comparison to hematite. New technologies Fortescue Metals Group (FMG) is using six modern allflux® fluidised bed separators in its iron ore plant (IM, April 2008). Fortescue is relying on allmineral’s technology for efficient sorting and classification of the iron ore. Six of the latest allflux® fluidised bed separators started operations this spring at Cloud Break. Each has the capacity to clean, sort and classify 170 t/h of iron ore with particles < 2 mm. The allflux process is based on the fluidised bed principle. An upward stream is generated in the coarse sand chamber that causes fine and light particles to rise, while large, heavy particles sink and are removed as ready-made concentrate. In the peripheral fine-sand chamber a pre-concentrate is generated that is cleaned on spirals. The allflux overflow contains only the finest slurry and coarser light particles. allflux fluidised bed separators are built for throughputs of 20 to 2,000 m³/h. The upper grain sizes are between 2 and 4 mm. The current and control features allow the 36 International Mining SEPTEMBER 2008 generation of three finely-separated, classified products by a single machine unit. allmineral says FMG chose its technology “because of the years of positive experiences with allflux separators in the South African iron ore industry and convincing results of pilot runs. allmineral’s technology completely fulfils the company’s process-related demands and offers considerable advantages relating to investment and operating costs.” The Metso Mining Group, working with Metso Automation, has created an advanced technology that it says will revolutionise how Metso guarantees the performance and reliability of its screens. The Screen Security Package (SSP) is a realtime monitoring system that collects information about the motion of the screen at different locations around the machine. It monitors the mechanisms and the ‘noise’ in the bearings simultaneously. Ron Kuehl, Vibrating Equipment Manager, Mining, North America says, “This new technology and level of accuracy allow us to design and set up vibrating equipment at a whole new level.” The SSP incorporates a patent pending Stress Monitoring System, which uses both the stroke angle and acceleration for evaluation and fine-tuning. It can simultaneously compare both the angles and values of the stroke (in acceleration) in the same spot on each side of the machine. If any anomalies are found, the system will notify the operators that an adjustment should be made to the machine to maximise the fatigue life of the unit. “This type monitoring system is unique,” says Kuehl, “in that it provides instant results to the customer, as well as transmitting the results to the factory service department for evaluation.” The SSP is a versatile program that can set customer-specific alarms for all types of vibrating equipment. Depending on the customer’s preference, these alarms can be communicated via e-mail alerts, sirens or flashing lights. Alternatively, the alarm can be tied into an existing PLC or computer system designed to monitor the whole plant. Another SSP advantage is that customers will be able to see their machines run in Metso’s factory during the manufacturing test. This technology will also allow the manufacturing team to qualify the machines using the range co-ordinates for the specific machine established by engineering. Once testing is complete, engineering will have concrete statistical information for that particular screen, thus creating a more efficient operation and improving delivery times. The Metso service team will also benefit from Document1 2/9/08 3:26 pm Page 1 IRON ORE real-time information provided by the SSP. Because the system can globally transmit machine statistics to any authorized person, it will be possible to suggest improvements, identify wear, predict failures, and assist with evaluating warranty claims. Remotely monitoring the screen readings will improve Metso’s response time, lower the operating expenses associated with Metso vibrating equipment, and provide more input to clients on what is happening at the site. A prototype of the SSP will be on display at the Metso MINExpo booth. In conjunction with its service strategy, the mining business line is developing the SSP system as one part of a ‘Smart Equipment’ platform. When complete, this project will improve the performance on many of Metso’s mining products. Metso Minerals will supply an iron ore beneficiation plant to BMM Ispat’s Hospet-Bellary mine in Karnataka, Southern India. The delivery will be completed by the end of 2010 and the been successfully commissioned. With these plants by Metso, BMM Ispat capacity goes up to 3 Mt/y and we aim to strengthen our position as a steel player and grow further”, said Dinesh Singhi, Chairman & Managing Director, BMM Ispat. Bateman India, part of Bateman Engineering Group, has been contracted by an iron ore producer and exporter, located in the Hospet/Bellary iron ore sector of India, to supply a 2.5 m wide, three-compartment long BatemanApic Jig – the first jig to be supplied to the iron ore sector by Bateman. The contract from the client covered design, procurement, fabrication, supply and commissioning of the jig, which will process float ore (naturally liberated ore) to separate it from the siliceous rock. The jig will handle 150 t/h of feed, with a particle size of -8 mm/+3 mm. The jig will also be able to process the -25 mm/+ 8 mm fraction by only adjusting the process control settings. The contract commenced in December 2007 and was completed in May 2008. Put ToughMet in your corner. ® ToughMet is the hardest working bearing material in the industry, giving you unparalleled strength and lubricity in one superior material. Proven successful in the toughest applications, ToughMet requires less maintenance and lubrication while virtually eliminating unplanned downtime. So, don't monkey around with conventional bronze or steel bearing materials. Put the 900 lb. gorilla to work for you, and you'll be eating your competition's lunch. An example of a Weba chute in an iron ore application. total value of the order is about €7 million. It comprises a scrubber, a spiral classifier, a high gradient magnetic separator (HGMS), a VPA vertical plate pressure filter, lamella thickeners, pumps as well as other related equipment, supervision of erection and commissioning. The new plant beneficiates iron ore fines through gravity separation and high gradient magnetic separation. The plant will be able to treat 250 t/h of iron ore fines. BMM Ispat aims to position itself as a major global steel player with a vision to produce 1.5 Mt/y of steel by 2011. “This is our repeat order for a similar plant supplied by Metso Minerals in 2007 which has The suitability of Apic jigging technology for this application was proved in test work at Bateman’s faciolity in South Africa, which showed good grade and recovery, well within the expectations of the client. The percentage iron in the product varied between 64.5 % and 65.5 % with an iron recovery of 80% and an average mass recovery of 72 %. In addition to this, the jig can recover an additional 16% by weight as middling product at a grade of 47%, which would be utilised by the client in future. Bateman-Apic jigs offer a cost-effective solution to processing and upgrading iron ores. They are supplied as permanent-fixture processing facilities and modular Visit us at Toughmet.com/gorilla-im or call us toll-free at 800-375-4205. NEW BEARING DESIGN GUIDE Optimize the fit and performance of your ToughMet alloy replacement bushings online at www.toughmet.com/ bearingdesign The 900-lb gorilla of bearing materials. SEPTEMBER 2008 International Mining 39 Document1 2/9/08 3:32 pm Page 1 IRON ORE process plants, either under turnkey (client owned and operated) or toll-treatment contracts. Pilot-scale units are available for process-development testing. The jigs feature a specially developed fines gate and the JIGSCAN system, both of which have overcome the problem experienced worldwide in the handling of fine ferrous ores. The gate minimises the back mixing of fines before discharge, while JIGSCAN is a fully integrated and computerised automatic system providing improved control over product quality and higher yields of ‘on-specification’ product. The product extraction system uses a vibrating screen system for increased control over product discharge to increase product recovery. The upgrading of ferrous ores by jigging has been done for many years internationally. In cases where the cut density exceeds 4.0 g/ml or where test work has shown that jigs offer sufficient performance, jigs are now the preferred route, as opposed to other density-separation techniques, due to their simplicity and low running costs. Eight Weba Chute systems are due to be installed and commissioned during the second half of 2008 at Mount Whaleback mine in Australia. This is the largest single pit, open cut iron ore mine in the world and represents Weba Chute’s first installation at one of BHP Billiton's operations in Australia, though they have previously been successfully installed and 40 International Mining SEPTEMBER 2008 commissioned at two other iron ore applications in Australia. Mount Whaleback selected six Weba Chutes for sink screen discharge transfer points and two for use on the float screen discharge chutes. The beneficiation plant at the mine treats contact ores using heavy medium (ferrosilicon), drums, cyclones and spiral circuits to separate the heavier iron ore from the lighter overburden materials. Of the six and two chutes respectively, one in each application is a spare. These will be used to swap out with chutes requiring maintenance, thus eliminating downtime and ensuring optimum productivity on the plant. The chutes were manufactured in South Africa and shipped to Australia in December 2007. Throughput for the chutes is 600 t/h with a particle size varying from +8 mm to -200 mm. The iron ore material has a high moisture content and this factor had to be taken into account during the design of each transfer point. Product from the sink screens is conveyed on a 900 mm wide conveyor while that from the float screens is on a 600 mm belt. Each Weba Chute is custom designed for the individual application taking into account factors such as belt width, belt speed, material sizes and shape and throughput. Further benefits, the company reports, “include an up to 80% reduction in material degradation, greatly reduced levels of dust and noise, reduced production losses due to fewer blockages, significantly reduced spillage and vastly improved levels of safety. Easy access is provided for inspection and maintenance purposes, and the system does not require ongoing supervision, again representing a saving in manpower and related costs.” The principle behind the Weba Chute system is not an alternative to conventional chute systems but rather a completely different and unique approach for the control and handling of bulk materials. The system uses a ‘supertube’ with a cascade scenario where 95% of the material runs on material at the same time. Seen in slow motion, the bottom layer of particles appears to move in a tumbling motion down the chute. This results in significantly reduced wear, and in many cases the lip remains completely covered by material and never needs replacement. This manner of optimum material control is taken a step further by designing the internal angle of the transfer chute to match the product with the belt speed, allowing the dramatically reduced spillage. Sandvik Mining and Construction has been awarded three contracts by Société Nationale Industrielle et Minière (SNIM) for the supply of iron ore materials handling equipment and drill Document1 2/9/08 3:33 pm Page 1 In Indian iron ore, Pilot Crushtec's Twister VSI crusher has proved to be an ideal machine. It enables quality iron ore to be liberated from poor quality material. A further advantage of these crushers has emerged because of tax legislation in India. If iron ore is broken into small sizes and exported, the miner is exempt from certain taxes. The Twister VSI crusher has proved to be the perfect means for achieving this rigs for the Port Minéralier de Nouadhibou and the open-pit mine in Zouérate, Mauritania. These contracts will all be delivered within 20 months. State owned SNIM is developing several iron ore mines in the region of Zouérate, located in the northwest of Mauritania. Current annual production is 12 Mt of iron ore, which the company plans to increase to 25 Mt by 2015. The first contract was awarded for the rehabilitation of the handling facilities of the port in Nouadhibou, with the objective of increasing production. The scope of work includes design, engineering, project management, quality assurance, manufacturing, fabrication, transportation, construction/erection on site, and commissioning and testing of one boom-type bucket wheel reclaimer, two luffable and slewable stackers, and four in-plant conveyors and transfer points. This turn-key system will have a capacity of 6,000 t/h. The second and third contracts consist of two Sandvik D90KS drill rigs and one top hammer DC121R drill rig. In the past, Sandvik has delivered several H series crushers to Zouérate and Nouadhibou. Cardero Resource recently successfully commissioned the Eriez magnetic separator pilot plant at its Pampa El Toro iron sands project, located in the Marcona District of southeast Peru, and quality iron concentrate has been produced. Phase II work operations will produce a 40-t iron concentrate sample that will be shipped to the US where additional processing will remove silica sand contaminants -- further upgrading the sample. The iron concentrate will then undergo SEPTEMBER 2008 International Mining 41 Document1 2/9/08 3:34 pm Page 1 IRON ORE The ERIEZ magnetic separator pilot plant consists of three core components, being a primary separator, a scavenger separator and a final cleaner separator, along with various associated hoppers and conveyor Systems extensive commercial scale melting tests aimed at producing a high-grade pig iron product, along with a vanadia and titania enriched slag. The Eriez Dry Magnetic Separator was installed at the company’s Acari testing facility close to the Pampa El Toro project. During Phase I work, about 83 t of iron sand was processed, producing 4.8 t of iron concentrate. Following completion of this work, samples were despatched for laboratory analysis. In order to get an early indication of concentrate grade, eight samples were rushed though the laboratory. These samples returned a mean concentrate grade of 46.1% Total Iron (FeTOT) and a calculated iron recovery of 96% indicating a very efficient and low cost upgrading process. The 46.1% FeTOT concentrate grade is preliminary in nature. Final concentrate grade would only be determined once secondary screening of the concentrate material has been completed to remove silica (17.39%) and other contaminants. Nevertheless the results are highly encouraging, but as a statistically small number of samples, additional analysis will be required to determine if these grades are representative. Critically, the concentrate samples contain some contaminants (for example, 17.39% silica), which when removed will increase the total iron grade. As these contaminants have a lower specific gravity and are coarser in grain size than the target magnetite, further concentrate upgrade through gravity separation or screening respectively will be feasible. Cardero is confident that regardless of the total Fe grade, results can be improved further through inexpensive secondary processing. IM Bruker B ruker AXS X-Ray Power for Minerals & Mining MINExpo 2008 Las Vegas Booth 4474 tthink h i n k fforward orward XRR F/ X F / X RRD D www.bruker-axs.com w ww.bruker-axs.com