Champion Iron Mines (TSX: CHM; US-OTC: CPMNF) has increased the historic resource at its Penguin Lake iron project tenfold in the southern portion of the Labrador Trough, 110 km southwest of the town of Fermont.
Penguin Lake’s in-pit inferred resource stands at 531.1 million tonnes grading 33.1% total iron (FeT) at a cut-off grade of 15% FeT.
Penguin Lake is 60 km southwest of Champion’s flagship Consolidated Fire Lake North project. The project is part of the Gagnon Holdings, which consist of five iron-rich concessions in the Gagnon Terrane of northeastern Quebec. The Gagnon Terrane encompasses the southern domain of the vast Labrador Trough.
In December 2012, Cartier Iron (CNSX: CFE) signed an option agreement with Champion to earn up 65% in Gagnon Holdings over four years by spending $6 million in staged exploration and development work on the properties, making cash payments to Champion totalling $1 million and issuing 2.5 million shares to Champion.
Once the earn-in is complete, the two companies would form a joint venture (reflective of their proportionate ownership interests in the properties) to explore and develop the concessions.
The resource estimate is based on 10 holes (3,300 metres) Cartier drilled into the southern portion of the tightly folded, bowl-shaped iron deposit last January and February.
“The fact that we’ve only drilled less than half of it is key — there is a lot of resource upside,” Jorge Estepa, Cartier’s vice-president, explains in a telephone call.
The completed resource makes Penguin Lake the largest iron resource in the southern Gagnon Terrane in the southern Labrador Trough, the company says, and there remains huge resource potential to the north and to the west of the deposit, where the iron formation is interpreted to resurface.
Cartier noted in a press release that while no recent drilling has been done in the northern part of the deposit, “the strong correlation of magnetic response to where iron formation surfaces and a historic drill hole located in the NW portion of the deposit, allow for projection of the modelled iron formation and an estimate of the exploration potential.”
He adds that “the interpreted 3-D model of iron formation includes an additional 700 to 900 million tonnes of similar grade as suggested by the current inferred resource, predominantly in the undrilled portion of the deposit to the north and northwest where additional resources might be identified.”
Cartier also points out that the natural cut-off grade of the Penguin Lake deposit is near 25% FeT, where only 0.6% of the material is below cut-off at an average grade of 23.2%, and well above the economic cut-off grade of 15% FeT.
The next steps at Penguin are to complete more metallurgical test work and a preliminary economic assessment.
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