Clear Hills Resource Development History

The Clear Hills iron deposits were initially discovered in 1924, and attracted considerable development interest during the 1950s and 1960s after Phillips Petroleum Company intersected “oolitic hematite” in the Rambling Creek area.

In 1956 and 1958, the Alberta Research Council mapped all the iron formation outcrops in the Clear Hills area (Kidd, 1959). In 1959, Premier Steel and Alberta Geological Survey estimated the deposit at 1.124 billion tons at 34% iron.[1]

Iron

Historical work carried out in the 1950s through 1970s was summarized in E.F. Bertram and G.B. Mellon’s 1975 report for the Alberta Research Council, entitled “Peace River Iron Deposits”, and by W.N. Hamilton in his “Clear Hills Iron Deposit: Geology, Minerology, and Ore Reserves” report for the Alberta Geological Survey (1980).

Hamilton (1980) stated “reserves are defined in four main segments, or ‘blocks’ of the Clear Hills iron deposit. These are referred to as Worsley (block A), Swift Creek/Rambling River (block B), Whitemud River (Block C) and South Whitemud River (block D) (Figure 2).  In blocks A and B the reserves are essentially proven, by extensive test drilling [which was done in the late 1950’s and early 1960’s, whereas] … Blocks C and D reserves are only roughly outlined.

The following historical mineral estimate in the following table is from Hamilton’s report and is based upon Bertram and Mellon’s work.  The terms “Reserves”, “Proven”, “Probable” and “Possible” are the historical terms used at the time to describe the iron deposit and are not compliant with NI 43-101 standards.

The Rambling Creek block is the one in which Ironstone focused its efforts in its 2008 51-hole drilling program and it is this block that forms the basis of the SRK Consulting NI 43-101 resource report, published in October 2010 which assigned an indicated iron resource of 140Mt and an inferred iron resource 63Mt and an indicated vanadium resource of 163Mt. 

The intent of Ironstone’s 2011 148-hole drilling program on the North Whitemud River block was to bring more of the historical mineral estimates into compliance with NI 43-101 requirements.

SRK Consultants (Canada) Inc. have combined the Rambling Creek resource with the new North Whitemud River resource in a revised NI 43-101 report in November 2011. Ironstone’s total compliant resource in the Clear Hills currently sits at 556.5Mt indicated, 86.9Mt inferred.

As the historical work was carried out by geologists commissioned by the governments of the day, it is reasonable to assume that best industry practices of the day were used in developing the mineral estimates at the time. As such, the Company believes that it is reasonable to believe that these historic resources can be brought to compliance with NI 43-101 requirements with a continued program of verification. 

Vanadium

Vanadium is of particular interest as a potential co-product in a Clear Hills iron mine. Assays conducted by SGS indicates an average of 0.22% V₂0₅ within the whole rock. After pre-concentration of the iron- and vanadium-rich ooid mass, the V₂0₅ concentration rises as high as 0.50%

The Clear Hills now contain the largest compliant Vanadium resource in North America, with an in-place indicated resource of 2,454 million pounds of  V₂0₅.

The Company believes the potential exists to find similar levels of  V₂0₅ across the balance of the deposit; however, this must still be demonstrated through further drilling and core evaluation.

Gold

Based on historical assays and government reports, Ironstone embarked on a multidisciplinary program to determine if commercial grades of precious metals exist in the ore body. After initial cyanidation results on select core samples were positive for silver and gold, a gold deportment study was commissioned by Ironstone’s at SGS Metallurgical Services in Lakefield, Ontario.

The study resulted in the identification, and documentation of, free milling gold within Ironstone’s core samples.  Further independent fire-assays are being conducted at present in order to quantify gold grades. It is the Ironstone’s goal to have these gold results reported in a future NI 43-101 resource report. 

Clear Hills Process Development History

A joint research program was undertaken in 1959 by the Governments of Alberta and Canada to assess the potential of the Clear Hills iron deposit. Initial samples sent to Krupp Industries Ltd. of Germany seem to indicate that the iron ore could be concentrated to 54-56% and could be used as blast furnace charge material.[2]

Testing by the Mines Branch in Ottawa in the early 1960s seemed to indicate that the Clear Hills iron ore would respond well to a process developed by R-N Corporation. To further evaluate the R-N process, a 5,286 ton bulk sample was excavated from beneath 15 m of overburden in the Swift Creek (Rambling Creek) segment of the deposit and shipped to the R-N pilot plant in Birmingham, Alabama. The pilot plant produced 111 dry tons of briquette iron (HBI). The estimated cost of the pilot plant operation was about $300,000.[3]

HBI produced at the R-N Corporation pilot plant

In the 1970s, the Alberta Research Council established a research project to identify a possible extraction or beneficiation process that would render the Clear Hills deposit economical. The study proposed to produce metallic iron concentrate by a process named “Grain Enlargement” or “GE Process”. Essentially a direct reduction iron beneficiation (DRI) process that reduces the iron minerals to metallic iron with coal in the presence of a small quantity of chloride salt. The process consists of blending together the iron with dried coal with ferrous chloride or calcium chloride.[4] The process has shown to be successful at lab-scale testing and additional small pilot tests were carried out in 1984.

The project did not advance beyond the bench-top pilot testing due to low world iron prices at the time, but the impressive results in metallization of the Clear Hills ore in excess of 90% Fe with removal of phosphorous and other deleterious elements, is the foundation upon which Ironstone is developing its process flow sheet. This work is currently being conducted and optimized at several pilot plant facilities in North America under the direction of HATCH engineering consultants, with results expected at the end of Q2 2012.

REFERENCES

[1] This estimate was prepared before the implementation of National Instrument 43-101 and no information is available regarding the method utilized to prepare the estimate. As such, the estimate is included here for historical purposes but should not be relied upon.

Kidd, D.J. (1959): Iron Occurrences in the Peace River Region, Alberta: Alberta Research Council Earth Sciences Report 59-3, 38p.

[2] Krupp, F. (1975) Final Report on Investigation and Tests Carried Out with Peace River Iron Ore; unpublished report by Krupp Industrie – und Stahblau, now labelled Alberta Research Councils Economic Minerals File FE-IR-12, 34 p.

[3] Samis, C. S., and Gregory, J., (1962): The Reduction of Clear Hills Iron Ore by the R-N Process, Alberta Research Council Information Series 40, 35p.

[4] Bertram, E.F. and Kay, W.C., (1978) Clear Hills Iron Ore Project Part XI – Grain Enlargement Project Summary Report; Product Research and Development Alberta Research Council, 90p.

[5] Hamilton, W.N., (1980) Clear Hills Iron Deposit, Geology Mineralogy and ore Reserves. Open File Report 1982-13 Alberta Geological Survey 51p.