IRON ORE OVERVIEW

Stellar Resources Limited is in the process of

evaluating two substantial magnetite
occurrences at Coolybring and Wilgena Hill
in the Tarcoola region of South Australia.
These extensive magnetite bodies are
located within a few kilometres of the
TransAustralian and Ghan railway lines and
in the same region as the
Middleback/Whyalla iron ore infrastructure
(Figure 1).

Figure 2: Aeromagnetic anomalies, Stellars Tarcoola tenements

Figure 1: Infrastructure for Stellars Iron Ore projects

The Company has carried out limited

exploration on these large aeromagnetic
anomalies and, through limited drilling and
surface mapping, has identified the
potential for several hundreds of millions of
tonnes of high magnetite jaspilite (Figure
2). Limited metallurgical testwork carried
out by the Company indicates potential for
commercially exploitable product from a
proportion of this material.

Location
The deposits lie in an area some 10km NE of
the township of Tarcoola, which is the
junction of the Trans-Australian railway and
the Ghan railway line (to Darwin). Tarcoola
is situated around 250km northeast of the
Middleback/Whyalla infrastructure (Figure 1)
and is linked by rail to this region, which lies
around 250km from the SA capital, Adelaide.

History
The magnetite bodies
were discovered as
a result of government
Figure 3: Comparison Coolybring/Wilgena Hill with Middleback Range
mapping, airborne
geophysical surveys
- RC drilling 12 holes totalling 1280m with
and (limited) drilling
routine assaying
in the 1950s and 1960s. Abundant shallow
- 2 diamond drill holes totalling around
resources in the Middleback Ranges
400m with routine assaying
probably discouraged any exploration until
- Metallurgical testing on 11 x 2m samples
recent times.
from the diamond holes
- Metallurgical testing on 4 composited
Stellar Resources predecessor, Grenfell
2m samples, 2 from each diamond hole
Resources, conducted limited exploration to
- Surface geological mapping at Wilgena
test the Coolybring system for Copper-Gold
Hill (J A Anderson, 2005)
potential, with little encouragement.
- Preliminary evaluation of the
commercial potential by Iron industry
From late 2004 to the present time, the
specialist (C J Robinson, Hematite
following exploration work was conducted
Consultants)
by Stellar:
Importantly, this work has confirmed
- Detailed aeromagnetics (100m line
that in regional geological terms the
spacing)
jaspilite at Tarcoola is likely to be
- Airborne gravity gradiometry (100m
equivalent to the Middleback Range
spacing)
jaspilite.
June 2007

IRON ORE OVERVIEW continued

Title Details
The two projects lie within EL 3089 in central
South Australia and are held by Hiltaba Gold
Pty. Ltd., a wholly owned subsidiary of Stellar
Resources Limited.
Minerals processed from this title are subject
to a 2% gross overriding royalty in favour of
the original licence holder.
A FALCON gravity survey was flown over
part of this EL, which included the Wilgena
and Coolybring areas, thereby triggering a
BHP Billiton claw-back right. Under this
agreement BHP Billiton can exercise a right
to acquire a majority ownership of the
project for a repayment of 5 to 7 times
Stellar Resources prior expenditure. Stellar
considers that BHP Billiton is unlikely to
exercise its buy-in right on a development of
the scale envisaged at Coolybring and
Wilgena Hill, but that decision is solely their
prerogative.

Figure 4: FALCON magnetics on Stellars Tarcoola tenements

Geophysical Data
The entire area is covered by government,
400m (EW) spaced magnetics &
radiometrics, and the area of interest is
covered by 100m (NS) spaced FALCON
data comprising magnetics (Figure 4),
gravity (Figure 5), radiometrics and DTM (or
topography) (Figure 6). The bulk of the
Coolybring magnetite body is also covered
by 80m (EW) spaced magnetic flown as part
of the coverage of the Tarcoola goldfield.

Geological Mapping
State Government 1:100,000 scale mapping
covers the region. There is no bedrock
outcrop at Coolybring and limited outcrop
at Wilgena Hill. Detailed mapping by John
Anderson for Stellar Resources (2005)
provides the most pertinent geological
mapping data of Wilgena Hill. (Figure 7)

Figure 5: FALCON gravity on Stellars Tarcoola tenements

Figure 6: Topography of Stellars Tarcoola tenements

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IRON ORE OVERVIEW continued

Figure 7: Geological map showing Wilgena

Hill and surrounding potential

Figure 8: Magnetics & gravity on Coolybring

Coolybring
Drilling Data
In addition to 12 shallow RC holes drilled on
the Coolybring magnetic anomaly, 2
diamond drill holes, DDH4 and DDH5, were
drilled in 2005 to depths of 222.4 and 176
metres respectively. Both holes were drilled
vertically. Geological logs for these holes
show depths to the jaspilite of 108.3m and
94.0m respectively.
The assay data from these core holes implies
that hole DDH4 intersected a more silicarich, silicate- or carbonate-poor BIF as
compared to DDH5. Assay averages
(arithmetic) on the 2m sample interval
results in BIF for the two holes were:
Hole
ID

Interval
(m)

Fe
Average
(%)

SiO2
Average
(%)

DDH4

108.3 to
222.4
94 to
176

39.2

43.5

35.8

38.8

DDH5

Figure 9: Drill section on Coolybring - showing depth to Fe mineralisation

Core samples were taken for comprehensive

iron ore suite and base metal assays and for
initial Davis Tube testwork (DTR).

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IRON ORE OVERVIEW continued

Synopsis of Results
Coolybring
Conclusions in relation to the Coolybring
occurrence from the data so far obtained
are:
1. A significant magnetite-rich BIF has been
identified at Coolybring with thickness of at
least 250 metres. Tertiary and
Mesoproterozoic cover is of the order of 91
metres at Coolybring and is interpreted to
be deeper over Coolybring South.
2. Fe grades average 39.2% and 35.8% in
DDH4 and DDH45 respectively which are
at the upper end of the range for banded
iron-formation (which usually range
between 20%) and 40% Fe.
3. Results from the DTR tests indicate that a
fine grinding may be necessary to achieve
an acceptable silica level (>5% SiO2) in the
concentrate.
The Coolybring magnetite body appears
from the magnetic data to be more
extensive and voluminous than the
Wilgena Hill body (Figure 2). The shallowest
part of the Coolybring body is recognisable
as a narrow, very high intensity magnetic
feature (Figure 10), and this has been the
focus of almost all drilling to date.
At Coolybring, depths of between 40 and
90m to the magnetite body have been
recorded with cover comprising around
50m of Tertiary and younger poorly
consolidated sediment cover, overlying midearly Proterozoic Tarcoola Formation
sediments.

Figure 10: Magnetic imaging on Coolybring

Wilgena Hill
At Wilgena Hill, Andersons mapping
indicates a smaller, but much shallower
(partly outcropping) body of magnetite.
Drilling, at this stage, is not permitted in
close proximity to the physical hill, as
Wilgena Hill is a registered site under the
Aboriginal Heritage Act.

However, there is reason to anticipate that

exploration and development access could
be granted, but Stellar Resources has not yet
pursued this avenue. Drilling on two
aeromagnetic anomalies to the north-east of
Wilgena Hill has been approved by existing
Aboriginal Heritage clearances. (Figure 11)

To the south and north of this shallowest

section the magnetite body is significantly
deeper. The magnetics in the Coolybring
south area (Figure 10) suggest the
magnetite body lies at around 500m depth.
Metallurgical testwork points to the
existence of different silica content and Fe
liberation characteristics within the jaspilite
sequence. From the limited DTR test work
completed to date it is indicated that
material suitable for economic beneficiation
of a marketable magnetite concentrate
exists. Further drilling is required to
determine the distribution and continuity of
this material.

Figure 11: Magnetic & gravity targets Wilgena Hill area

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IRON ORE OVERVIEW continued

Proposed Work
A major new drilling program to provide
information on the limits of the magnetite
body at Coolybring and the distribution of
the favourable metallurgical material is
required. In addition to standard assay work,
substantial metallurgical test work (DTR) is
required to follow up on the limited
metallurgical testwork that has been
completed to date.
Drilling to enable a similar classification of
the distribution of jaspilite and metallurgical
characteristics in the Wilgena Hill area is
also required.
Stellar considers that the next phase of the
evaluation of these magnetite bodies will
require a substantial drilling, assaying &
metallurgical program carried out by a
dedicated group with expertise in iron-ore
projects. Stellar Resources, with its diverse
range of mineral exploration interests, is
contemplating a partnership with an
external group which can provide the
relevant iron ore expertise to further
evaluate these potentially very valuable
resources.

June 2007