Wonmunna Iron Ore Project

Background and Location

AAMC has executed a terms sheet with Ascot Resources Limited (Vendor) in relation to the proposed acquisition of the Wonmunna Iron Ore Project (Wonmunna).  The parties are now working to finalise a formal sales and purchase agreement which AAMC expects will be executed within April 2018.

Wonmunna is located 80km northwest of Newman and circa 360km south of Port Hedland – along the Great Northern Highway (Figure 1).  Wonmunna comprises:

  • one granted exploration license E47/1137;
  • three mining leases M47/1423, M47/1424 and M47/1425 granted in April 2012; and
  • two miscellaneous licenses;

all situated within the East Pilbara Shire.

Access to Wonmunna is via the sealed Great Northern Highway, which intersects its boundaries and provides easy access for mining operations and road transport.

Wonmunna comprises four (4) primary deposits hosted by the Marra Mamba Iron Formation – namely, North Marra Mamba (NMM), Central Marra Mamba (CMM), South Marra Mamba (SMM) and East Marra Mamba (Figure 2).  The Marra Mamba Iron Formation is the basal member of the Hamersley Group in Western Australia and is host to major iron-ore deposits in its upper Mt Newman Member including those mined at the nearby Hope Downs, Mining Area C and West Angeles operations.

Wonmunna’s three mining leases contain the three deposits NMM, CMM and SMM but only the NMM and CMM deposits are currently included in AAMC’s project development plans and business case for the development of Wonmunna.  The SMM and EMM deposits contain Inferred Resources only and would require further drilling before any Reserves could be defined within them.

Both the SMM and EMM deposits provide obvious potential to extend Wonmunna’s life and its production rate.

Note 1 Subject to completion of a formal sales and purchase agreement with Vendor

Figure 1 Location Plan

Note 1 Subject to completion of a formal sales and purchase agreement with Vendor

Figure 2:  Wonmunna Tenement Plan (sourced from Vendor)

Geology, Mining and Metallurgy

In January 2015 the Vendor reported a maiden Probable Ore Reserve estimate in accordance with JORC 2012 guidelines for the Wonmunna Iron Ore Project of 28.9 million tonnes (Mt) @ 58% Fe.  The Ore Reserve estimate is based on pit designs and mine schedules for the three initial mining areas at Wonmunna that contain Indicated Mineral Resource estimates (Table 1).

Table 1:  Wonmunna Iron Ore Project Ore Reserve Estimate (sourced from Vendor)

Preliminary mine planning work performed by AAMC has shown that the Ore Reserves from the NMM(W), NMM(E) and CMM deposits at a 59% head grade will be circa 20.4Mt.   This is the Ore Reserve estimate currently included, at a production rate of 2mtpa, in AAMC’s project development plans and business case for the development of Wonmunna.

With the potential for the Inferred Resources to be converted to Reserves following additional exploration activities, along with the potential for success from other exploration targets including from within the environmental exclusion zone and within 5 metres of and below the water table, AAMC believes a mining inventory in excess of 23Mt is possible.

The Ore Reserves originate from a JORC 2012 compliant Mineral Resource estimate of 84.3mt based on an iron cut-off grade of 50% which resulted from extensive drilling programmes involving 1,200 holes and 56,376 metres of drilling in total (Table 2).

Table 2:  Wonmunna Iron Ore Project Ore Resource Estimate (sourced from Vendor)

Initial mine scheduling work indicates the potential to mine at up to a 5Mtpa production rate to produce AAMC’s targeted head grade of 59% Fe.  In the early years, the mining operation would target low strip ratio zones at a 2Mtpa rate to access ore sooner and then a series of “cut-backs” would allow the mine to ramp-up to a 5Mtpa production rate within a period of 2-3 years.

With the initial mining operation conducted above the water table, waste dumps located immediately adjacent to the mining areas and the Reserves shallow, near surface and with modest strip ratios competitive mine operating costs will be realised.

Figure 3 provides schematic cross sections to highlight the nature of the deposits.

Metallurgical test work has confirmed the similarity of the ore characteristics to that mined by Rio Tinto at the West Angelas operation, some 30km to the west of Wonmunna.  West Angelas has supplied Marra Mamba lump and fines products either on a stand-alone basis or as a part of Rio Tinto’s “Pilbara blend” since 2001 so the ore type is well known and understood in the market.

Figure 3:  Wonmunna Schematic Cross Sections (sourced from Vendor)

Mine Infrastructure

AAMC’s planned mining operation at Wonmunna will require the following key items of infrastructure:

  • Ore stockpiles and waste dumps;
  • Accommodation village;
  • Water borefield;
  • Offices, workshops and stores;
  • Process plant;
  • Power generation plant;
  • Access roads; and
  • Ore haulage road

In addition to the geological, mining and metallurgical investigations surface hydrology and groundwater studies were also completed in relation to the required infrastructure items.

Mining Tender

In November 2014 the Vendor sought tenders for mining and processing packages with options to allow contractors to tender on separable mining and processing components if required.  The tender was intended as an all-in solution, with contractors requested to bid on the provision of all items except for the water borefield and camp facilities.  The tender included all power, plant, equipment and infrastructure to successfully deliver the capacity and grade according to the schedule provided.

In July 2015 the Vendor retendered the mining services contract.  The prices that were received through this 2015 tender have been used by AAMC to model the Wonmunna project.


Environmental approvals required for the mining of the Wonmunna iron ore deposit are all in place.

The environmental approvals have been based on the following key assumptions:

  • A 500m wide exclusion zone is maintained either side of the Weeli Wolli creek (1km in total) whereby no ground disturbing activity will occur within this area
  • Mining will occur above water table (i.e. down to a depth of 50m from surface)

Approvals in place include:

  • Mining Proposal (DMP) – including mine closure plan
  • Native Vegetation Clearing Permit – NVCP (DMP/DEC)

Based on the findings and conclusions from numerous studies the planned disturbance will have minimal impact on flora and fauna communities, surface and ground water systems and surrounding land values.

Environmental approvals for the construction and operation of the ore haulage road that will connect the project to the Cloudbreak mine site will be secured by AAMC in 2018.

Transport and Export of Ore

AAMC has successfully negotiated an iron ore sales and purchase agreement with Fortescue Metals Group (Fortescue) which gives AAMC the right to deliver ore into stockpile on the Cloudbreak mine site where it will be purchased by Fortescue.

AAMC is to its knowledge the only Australian iron ore mining junior with such an agreement with one of the major Australian iron ore producers.

Wonmunna Project Development Timeline

The Wonmunna Project is now ‘development ready’ with all major approvals in place and costing studies completed for the project.

Subject to completion of the acquisition, project financing and the securing of tenure over the ore haulage road, AAMC anticipates that the Wonmunna Iron Ore Project will be ready for development in the third quarter of 2018 with first ore scheduled for the fourth quarter.