KOOLAN ISLAND

Mount Gibson Iron Limited released a resource estimate update for its Koolan Island Project located in Western Australia.

For the quarter ended, reported that total material movement for the March quarter was 18% below the previous quarter however ore production and sales increased by 35% compared with the previous quarter. Total material movement was restricted by increased tropical cyclone activity and associated rainfall. The wet season which predominantly corresponds to the March quarter restricted ore production from the Mullet Pit to elevated and dryer benches. Development of the Mullet pit also focused on establishing long term haul road access and cutting back the Acacia ore zone. Ore production for the quarter was largely sourced from Eastern Pit with mining of the original BHP lower bench being completed which has exposed the central ore zone and reduced the pit stripping ratio. Backfilling of the Barramundi West pits was well advanced during the quarter and rehabilitation of this area has commenced. Also reported that resource infill drilling was completed in Eastern Pit during the quarter and drilling in the Mullet – Acacia pits commenced. A total of 60 holes were drilled for 5,359m. Hole PKDD197 intersected 19.1m @ 65.1% Fe from 91.3m.

Reported that operations were modified substantially in the December Quarter resulting from iron ore customers either deferring shipments or failing to collect cargoes in accordance with binding iron ore purchase agreements. Koolan Island management moved quickly to minimise cash expenditure by reducing mine operating activity, reducing equipment and personnel requirements and suspending capital project activity. As a consequence of these measures equipment utilised on short term hire agreements was demobilised, seawall construction suspended, Main Pit Footwall rehabilitation suspended, Main Pit dewatering scaled back, non critical capital works suspended, Main West cut back suspended, Blinker Hill cut back suspended and Crusher Hill cut back suspended, resulting in a reduction of the contract workforce of 160 personnel and a reduction in total material movement of 32% compared with the previous quarter whilst ore production was reduced by 23% when compared with the previous quarter. With the suspension of both the Main Pit cut back and Main West Pit, operations focused on the East-Barramundi and Mullet-Acacia pits. The small Barramundi East Pit was completed in the quarter and backfilling of this open pit commenced. Access to the East-Barramundi Pit from the west was established during the quarter which improved truck productivity due to pit access being closer in proximity to the waste facility. Reverse circulation drilling continued throughout the December quarter, predominantly within the Barramundi and Eastern orebodies. The drilling is required to reduce the intersection spacing within the existing resource to approximately 25 metres and has enabled ongoing improvements in the accuracy and quality of the resource estimate. During the quarter 105 holes were completed for 9,234 metres. At Barramundi prospect, hole PKRC867 intersected 7m @ 64.9% Fe from 26m.