Mt Forrest (Fe, Au)

MT FORREST PROJECT

The Company has continued to review development options for the Mt Forrest Iron Project.

Elevated economic outlook for iron ore has materially re-activated interest is the Company’s Mt Forrest Project.

Discussions with infrastructure groups were ongoing during the Quarter with the aim of establishing a framework for a joint approach to infrastructure development in the Midwest region of Western Australia.

The current regional infrastructure concept includes collaborating with other companies in the area surrounding the Mt Forrest Project to create ‘critical mass’ which would support the resources required to fully evaluate the economics of a large scale infrastructure solution.

Discussions are at an early stage and it is uncertain if a commercial outcome will result. However, the Company is encouraged by these early stage discussions and will continue to engage in these discussions in order to determine if involvement may result in a commercial benefit for shareholders of Mindax Limited.

The Company is encouraged by the concepts presented and is working towards gaining further understanding of the potential of this initiative to unlock the stranded iron ore assets in the Midwest region of Western Australia.The Mt Forrest Iron Project comprises seven mining leases and is located 600 km from the Port of Geraldton and 165 km from the southbound railway at Menzies and around 648 km from the port at Esperance.

Mindax has discovered and built a significant iron ore inventory in beneficiated magnetite and DSO materials. The current primary magnetite JORC Mineral Resource stands at 1.71 billion tonnes @ 31.8% Fe (248.2 Mt @ 32.6% Fe Indicated and 1,462.4 Mt @ 31.6% Fe Inferred). Recoveries from extensive Davis Tube Recovery (DTR) analysis are in the range 35-40% by weight and concentrate iron grades are of the order of 66-70% Fe, 2.5-7% SiO2. Primary grades of greater than 50% Fe have been encountered with the strong presence of micro-platey hematite. The Mt Forrest iron inventory has the potential to sustain steel feed over a thirty (30) year time frame.

The Company has completed an updated scoping study for the development of a mining business at Mt Forrest. The study has been carried out to normal industry standards and aims to achieve an accuracy of +/- 30 per cent. It is substantially based on resources of an inferred JORC status. The key points of the study are:

Potentially very positive project for a beneficiated DSO product.
The DSO Regolith option is based on production of 2Mtpa of beneficiated hematite-goethite product over approximately a 5 year mine life.
A massive magnetite resource is available which will potentially allow a large scale operation.

Mt Forrest Target areas The current JORC regolith resource reporting above 40% Fe cutoff stands at 27.1 Mt @ 44.0% Fe (12.3 Mt Indicated @ 45.5% and 14.8 Mt Inferred @ 42.7%). Mindax has identified additional regolith exploration targets. Drilling to date comprises 674 holes for an aggregate 41,375m since commencement in December 2009. Early metallurgical work has confirmed that where necessary, this material appears amenable to beneficiation. Resource delineation will increase the resource confidence for the Mineral Resource inventory and target newly accessible areas of mapped goethitic material and the up-dip projections of high-grade (>45% Fe) magnetite mineralisation.

In addition to resource delineation work, the company has been granted Miscellaneous Licences to allow identification of water resources for an eventual operation and for a magnetite slurry pipeline facility to Menzies on the present rail link to Esperance. Preliminary engineering and hydrology studies of these licences have been undertaken. Drill core has been obtained from the resource for metallurgical testing, engineering logging and petrological studies.

Discussions are continuing with a range of technical services and infrastructure providers, including the Port of Esperance and Geraldton, above and below rail providers, environmental consultants, and metallurgical advisors. Meetings were held with the aboriginal heritage groups and the registered native title applicant as part of the ongoing Aboriginal Heritage Management Program.

Updated Scoping Study

The Updated Scoping Study (UStudy) referred to in this report is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised.t..

Mt Forrest Magnetite Mineral Resource Consolidation

The magnetite mineral resource was also upgraded during the year to 1.7 billion tonnes of a head Fe grade of 31.8% (JORC Indicated and Inferred Mineral Resource classification, see Table 2 below).

A decision was made during the year to consolidate the resource models for the magnetite mineralisation for future modelling. Optiro had undertaken recent resource estimates for the Company for the regolith and magnetite mineralisation, as detailed in announcements lodged on 22 November 2011 and 2 December 2011. The 22 November 2011 mineral resource announcement also included data from the magnetite mineralisation model prepared by CSA Global Ltd (“CSA”). A review of this model by Optiro against resource drilling has found that the model performs appropriately at its Inferred resource classification and the estimated grades are considered to be extrapolated.

The consolidation of the resource models undertaken by Optiro allows for more streamlined reporting of the magnetite resource going forward. As part of the consolidation of the CSA magnetite resource model the following changes were made to the model by Optiro, so as to bring it into line the methodology adopted by Optiro in their current magnetite resource model:

density changed to 3.5 from 3.3; and
reported the magnetite mineralisation down to the 300m RL. Previously this had been reported over a range of depths.

Table 2 summarises the reported consolidated magnetite resource at a 25% Fe cut-off, noting that approximately 75% of the Inferred Resource should be considered as extrapolated.

Table 2: July 2012 Mt Forrest Iron Consolidated Mineral Resource Magnetite Mineralisation at a 25% Fe Cut-Off

Davis Tube Recovery Results at 40 Micron including High Tenor Magnetite

Extensive Davis Tube Recoveries (“DTR”) testwork was carried out through the Mt Forrest project area. Some 930 analyses have been completed to establish the variation within the magnetite resource. This allows differentiation of prospects as far as likely concentrates are concerned. It also contributes significantly to the geological knowledge of what is a significant mineralised system.

Drill hole MFC0303 intersected several high-grade zones, with primary grades up to 49% Fe and weight recoveries up to 60%, averaging 70.8% Fe over 100 metres and presenting an ultraclean concentrate with very low contaminants. A best weight recovery of 62.3% with a concentrate grade of 71.1% Fe indicates an ultra-clean magnetite specification. Analysis of selected DTR tails confirmed certain mineralisation includes a hematite component potentially enhancing overall Fe recoveries.

An average head grade of 37.5% Fe returns an average weight recovery of 35.6% and a concentrate of 68.8% Fe and 4.8% SiO2. Phosphorus, Alumina and Sulphur are all very low and indicate a high quality product can be achieved.

Mt Forrest Gold Update

Significant gold anomalism has been confirmed along the western limb of the Mt Richardson syncline, especially at the Toucan and Jason’s Find/Macaw prospects. This work has been carried out on the principle that the area is known to include significant gold mineralisation at Paradise Bore and that there is wider gold prospectivity. It is important to further quantify that knowledge to ensure full value is achieved from earthmoving activities when iron mining commences.

First pass gold assays from bulk composite samples have been returned and the assays have extended gold mineralisation along strike in areas previously tested for gold. This additional new mineralisation confirms the significance of potentially economic gold at these prospects at Mt Forrest. Composites (10 metres) were generated from pulp material used from the iron ore RC drilling undertaken from December 2009 to February 2011.

A total of 2,727 samples were submitted and 134 samples returned a gold value >0.1g/t Au. A total of 28 samples returned values >0.5g/t Au including a best intercept from hole MFC220 returning 10m @ 2.18g/t from 30m.

Gold mineralisation was first discovered in the early 1990’s as small narrow discontinuous concentrations located near surface and at depth in narrow quartz veins hosted within quartz magnetite banded iron formations. In places significant quantities of higher grade gold mineralisation makes up sub-economic quantities. Sipa NL has previously released a JORC mineral resource (inferred) for the Paradise Bore prospect of 400,000t @ 2.8g/t Au for 36,000 ounces. Desktop studies identified the potential for gold to be mined along with the iron within the potential footprint of a conceptual iron pit. The oxidised gold resides within the iron contacts and mafic waste material. This prompted the exercise of assaying all iron drilling that was previously assayed for iron.

These latest gold assays continue to support surface geochemical gold anomalies and drill intercepts previously identified by Sipa NL. This gold mineralisation is primarily concentrated along the western limb at Jason’s Find, Paradise Bore and Toucan. Gold assays have been extended to drill holes on both fold limbs. A significant anomaly has now been identified on the western side.

RC and Diamond Drilling at Toucan have recognised stringy quartz veins hosted by mafic saprolite and oxidised cherty BIF. The higher grade gold assays are generally associated with 1-5 metre thick quartz veins caused by hydrothermal alteration and fluid remobilisation along lithological contacts and fractures.

Gold assays from Jason’s Find and Macaw confirmed the mineralisation is hosted at surface within laterised gravels, as supergene enrichment in the oxide zone and the primary mafic and banded iron units at depth. Four recent magnetite holes (MFC0333 – MFC0336) were assayed for gold and returned anomalous values >500ppb as deep as 250 metres downhole. A previous Sipa hole BNC2 returned gold values up to 3.0 g/t. MFC0335 and MFC0336 returned anomalous gold beneath BNC2 indicating that mineralisation continues at depth. The latest results indicate there may be potential for high grade gold lodes >10g/t at depth based upon previous drilling in this area.

One metre composites have been collected and sample prepared awaiting assay. The gold assays will be interpreted and additional drilling and resource modeling will then be undertaken to generate a new gold resource.

Mindax has maintained a strong and successful relationship with the various cultural heritage and environment stakeholder groups by ongoing consultation and involvement. An environmental management plan is in place and there is frequent interaction with Department of Environment and Conservation personnel.

The Mt Forrest project initially came into the Mindax portfolio as a gold project including a small gold resource at Paradise Bore. Gold anomalism supported by scout drilling intercepts outlines 10 km of exploration potential along the western limb of the Mt Forrest fold. A check assay program on iron drilling sample was carried out in parallel to the iron program. This identified several significant intervals including 2.18 g/t over 10 metres from 30 metres down hole in MFC220. This program will be extended through selected drill holes with a view to identifying any significant gold mineralisation, particularly gold that may need to be moved in the pre-stripping of future iron pits.

ACN 106 866 442

		Mt Forrest (Fe, Au) MT FORREST PROJECT The Company has continued to review development options for the Mt Forrest Iron Project. Elevated economic outlook for iron ore has materially re-activated interest is the Company’s Mt Forrest Project. Discussions with infrastructure groups were ongoing during the Quarter with the aim of establishing a framework for a joint approach to infrastructure development in the Midwest region of Western Australia. The current regional infrastructure concept includes collaborating with other companies in the area surrounding the Mt Forrest Project to create ‘critical mass’ which would support the resources required to fully evaluate the economics of a large scale infrastructure solution. Discussions are at an early stage and it is uncertain if a commercial outcome will result. However, the Company is encouraged by these early stage discussions and will continue to engage in these discussions in order to determine if involvement may result in a commercial benefit for shareholders of Mindax Limited. The Company is encouraged by the concepts presented and is working towards gaining further understanding of the potential of this initiative to unlock the stranded iron ore assets in the Midwest region of Western Australia.The Mt Forrest Iron Project comprises seven mining leases and is located 600 km from the Port of Geraldton and 165 km from the southbound railway at Menzies and around 648 km from the port at Esperance. Mindax has discovered and built a significant iron ore inventory in beneficiated magnetite and DSO materials. The current primary magnetite JORC Mineral Resource stands at 1.71 billion tonnes @ 31.8% Fe (248.2 Mt @ 32.6% Fe Indicated and 1,462.4 Mt @ 31.6% Fe Inferred). Recoveries from extensive Davis Tube Recovery (DTR) analysis are in the range 35-40% by weight and concentrate iron grades are of the order of 66-70% Fe, 2.5-7% SiO2. Primary grades of greater than 50% Fe have been encountered with the strong presence of micro-platey hematite. The Mt Forrest iron inventory has the potential to sustain steel feed over a thirty (30) year time frame. The Company has completed an updated scoping study for the development of a mining business at Mt Forrest. The study has been carried out to normal industry standards and aims to achieve an accuracy of +/- 30 per cent. It is substantially based on resources of an inferred JORC status. The key points of the study are: Potentially very positive project for a beneficiated DSO product. The DSO Regolith option is based on production of 2Mtpa of beneficiated hematite-goethite product over approximately a 5 year mine life. A massive magnetite resource is available which will potentially allow a large scale operation. The current JORC regolith resource reporting above 40% Fe cutoff stands at 27.1 Mt @ 44.0% Fe (12.3 Mt Indicated @ 45.5% and 14.8 Mt Inferred @ 42.7%). Mindax has identified additional regolith exploration targets. Drilling to date comprises 674 holes for an aggregate 41,375m since commencement in December 2009. Early metallurgical work has confirmed that where necessary, this material appears amenable to beneficiation. Resource delineation will increase the resource confidence for the Mineral Resource inventory and target newly accessible areas of mapped goethitic material and the up-dip projections of high-grade (>45% Fe) magnetite mineralisation. In addition to resource delineation work, the company has been granted Miscellaneous Licences to allow identification of water resources for an eventual operation and for a magnetite slurry pipeline facility to Menzies on the present rail link to Esperance. Preliminary engineering and hydrology studies of these licences have been undertaken. Drill core has been obtained from the resource for metallurgical testing, engineering logging and petrological studies. Discussions are continuing with a range of technical services and infrastructure providers, including the Port of Esperance and Geraldton, above and below rail providers, environmental consultants, and metallurgical advisors. Meetings were held with the aboriginal heritage groups and the registered native title applicant as part of the ongoing Aboriginal Heritage Management Program. Updated Scoping Study The Updated Scoping Study (UStudy) referred to in this report is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised.t.. Mt Forrest Magnetite Mineral Resource Consolidation The magnetite mineral resource was also upgraded during the year to 1.7 billion tonnes of a head Fe grade of 31.8% (JORC Indicated and Inferred Mineral Resource classification, see Table 2 below). A decision was made during the year to consolidate the resource models for the magnetite mineralisation for future modelling. Optiro had undertaken recent resource estimates for the Company for the regolith and magnetite mineralisation, as detailed in announcements lodged on 22 November 2011 and 2 December 2011. The 22 November 2011 mineral resource announcement also included data from the magnetite mineralisation model prepared by CSA Global Ltd (“CSA”). A review of this model by Optiro against resource drilling has found that the model performs appropriately at its Inferred resource classification and the estimated grades are considered to be extrapolated. The consolidation of the resource models undertaken by Optiro allows for more streamlined reporting of the magnetite resource going forward. As part of the consolidation of the CSA magnetite resource model the following changes were made to the model by Optiro, so as to bring it into line the methodology adopted by Optiro in their current magnetite resource model: density changed to 3.5 from 3.3; and reported the magnetite mineralisation down to the 300m RL. Previously this had been reported over a range of depths. Table 2 summarises the reported consolidated magnetite resource at a 25% Fe cut-off, noting that approximately 75% of the Inferred Resource should be considered as extrapolated. Davis Tube Recovery Results at 40 Micron including High Tenor Magnetite Extensive Davis Tube Recoveries (“DTR”) testwork was carried out through the Mt Forrest project area. Some 930 analyses have been completed to establish the variation within the magnetite resource. This allows differentiation of prospects as far as likely concentrates are concerned. It also contributes significantly to the geological knowledge of what is a significant mineralised system. Drill hole MFC0303 intersected several high-grade zones, with primary grades up to 49% Fe and weight recoveries up to 60%, averaging 70.8% Fe over 100 metres and presenting an ultraclean concentrate with very low contaminants. A best weight recovery of 62.3% with a concentrate grade of 71.1% Fe indicates an ultra-clean magnetite specification. Analysis of selected DTR tails confirmed certain mineralisation includes a hematite component potentially enhancing overall Fe recoveries. An average head grade of 37.5% Fe returns an average weight recovery of 35.6% and a concentrate of 68.8% Fe and 4.8% SiO2. Phosphorus, Alumina and Sulphur are all very low and indicate a high quality product can be achieved. Mt Forrest Gold Update Significant gold anomalism has been confirmed along the western limb of the Mt Richardson syncline, especially at the Toucan and Jason’s Find/Macaw prospects. This work has been carried out on the principle that the area is known to include significant gold mineralisation at Paradise Bore and that there is wider gold prospectivity. It is important to further quantify that knowledge to ensure full value is achieved from earthmoving activities when iron mining commences. First pass gold assays from bulk composite samples have been returned and the assays have extended gold mineralisation along strike in areas previously tested for gold. This additional new mineralisation confirms the significance of potentially economic gold at these prospects at Mt Forrest. Composites (10 metres) were generated from pulp material used from the iron ore RC drilling undertaken from December 2009 to February 2011. A total of 2,727 samples were submitted and 134 samples returned a gold value >0.1g/t Au. A total of 28 samples returned values >0.5g/t Au including a best intercept from hole MFC220 returning 10m @ 2.18g/t from 30m. Gold mineralisation was first discovered in the early 1990’s as small narrow discontinuous concentrations located near surface and at depth in narrow quartz veins hosted within quartz magnetite banded iron formations. In places significant quantities of higher grade gold mineralisation makes up sub-economic quantities. Sipa NL has previously released a JORC mineral resource (inferred) for the Paradise Bore prospect of 400,000t @ 2.8g/t Au for 36,000 ounces. Desktop studies identified the potential for gold to be mined along with the iron within the potential footprint of a conceptual iron pit. The oxidised gold resides within the iron contacts and mafic waste material. This prompted the exercise of assaying all iron drilling that was previously assayed for iron. These latest gold assays continue to support surface geochemical gold anomalies and drill intercepts previously identified by Sipa NL. This gold mineralisation is primarily concentrated along the western limb at Jason’s Find, Paradise Bore and Toucan. Gold assays have been extended to drill holes on both fold limbs. A significant anomaly has now been identified on the western side. RC and Diamond Drilling at Toucan have recognised stringy quartz veins hosted by mafic saprolite and oxidised cherty BIF. The higher grade gold assays are generally associated with 1-5 metre thick quartz veins caused by hydrothermal alteration and fluid remobilisation along lithological contacts and fractures. Gold assays from Jason’s Find and Macaw confirmed the mineralisation is hosted at surface within laterised gravels, as supergene enrichment in the oxide zone and the primary mafic and banded iron units at depth. Four recent magnetite holes (MFC0333 – MFC0336) were assayed for gold and returned anomalous values >500ppb as deep as 250 metres downhole. A previous Sipa hole BNC2 returned gold values up to 3.0 g/t. MFC0335 and MFC0336 returned anomalous gold beneath BNC2 indicating that mineralisation continues at depth. The latest results indicate there may be potential for high grade gold lodes >10g/t at depth based upon previous drilling in this area. One metre composites have been collected and sample prepared awaiting assay. The gold assays will be interpreted and additional drilling and resource modeling will then be undertaken to generate a new gold resource. Mindax has maintained a strong and successful relationship with the various cultural heritage and environment stakeholder groups by ongoing consultation and involvement. An environmental management plan is in place and there is frequent interaction with Department of Environment and Conservation personnel. The Mt Forrest project initially came into the Mindax portfolio as a gold project including a small gold resource at Paradise Bore. Gold anomalism supported by scout drilling intercepts outlines 10 km of exploration potential along the western limb of the Mt Forrest fold. A check assay program on iron drilling sample was carried out in parallel to the iron program. This identified several significant intervals including 2.18 g/t over 10 metres from 30 metres down hole in MFC220. This program will be extended through selected drill holes with a view to identifying any significant gold mineralisation, particularly gold that may need to be moved in the pre-stripping of future iron pits.