Steeple Hill Iron Project:

Recovering Alluvial Hematite

through Dry and Wet

Processing

Sheldon Coates

B. Sc Geology

M.Sc in Mineral Economics

MBA in Technology Management

DISCLAIMER

The information in this presentation provided by Fairstar Resources

Limited and Sheldon Coates is published to inform you about

Fairstar and its activities. Some statements involve risk and

uncertainty, that could cause actual results to differ from estimated

results. All reasonable effort has been made to provide accurate

information, but we do not warrant or represent its accuracy, and

reserve the right to make changes at any time without notice.

To the extent permitted by law, Fairstar Resources Limited accepts

no responsibility or liability for any losses or damages of any kind

arising out of the use of information contained in this presentation.

Recipients should make their own enquiries in relation to any

investment decisions, or decisions based on technical information

provided.

Steeple Hill Iron Project,

Eastern Goldfields of WA • Situated 80km east of Kalgoorlie, WA.

• Centred about 25km north of Trans Australia railway line

• Small, shaly BIF, contains magnetite at depth

• Weathered to hematite at surface, grade 40% to 62% Fe

• Eroded hematite upgraded as it moves downhill and into

shallow creek system

• Hematite becomes subrounded particles, mostly 1-4mm

• Alluvial hematite grade 58% Fe +/-3%, low P , but has

moderate SiO2 7%, and Al2O3 6%. Low LOI 1.7%

Location

Map

Geological Cross Section

Hematite Outcrop

Eroded Hematite at Base of Hill, 59% Fe

Creek System with Hematite Gravel

Hematite Gravel in Creek Bank;

60% Weight Recovery

Exploration of Alluvial Hematite Deposit

• Mapping indicated significant extent of alluvial hematite

• Pitting with excavator confirmed thickness and economic

proportions of hematite. Also that alluvials are free digging

• Aircore Drilling on 200m x 200m grid along 12km of

valley

• One metre samples taken and processed at metallurgical

laboratory to give percentage recovery and grade of

hematite product

• Consistent hematite product grade 58% Fe +/- 3%

Test Pit with Hematite Gravel Bands

Plan of Drilling

and Alluvial

Hematite

Flow Sheet of Metallurgical Testwork

Wet screen to remove slimes (-45um)

Attrition in vertical blade attritioner

Wet screen at 0.6mm, fines to storage for spiralling

Screen at 6.3mm, oversize crushed to -4mm

0.6 –4mm fraction sent to Dense Media Separator (SG3.4)

Sinks dried, weighed and analysed by XRF for Fe suite

Results reported as percentage hematite recovery and grade

1555 one metre samples from 666 holes analysed

DMS Fractions; SG 3.4

Closeup of Hematite Product.

Graph of All Hematite Recoveries

Sorted Hematite Concentrate Recoveries from Alluvials,

minus Duplicate Samples and Twinned Holes

0

10

20

30

40

50

60

70

80

1

35 69

103

137

171

205

239

273

307

341

375

409

443

477

511

545

579

613

647

681

715

749

783

817

851

885

919

953

987

1021

1055

1089

1123

Number of Samples

Hem

atit

e R

eco

very

%

Series1

Graph of Hematite Grades

0

10

20

30

40

50

60

70

1 49 97 145 193 241 289 337 385 433 481 529 577 625 673 721 769 817 865 913 961 1009 1057 1105

Fe%

Sorted Aircore Fe Grades; minus Duplicates and Twinned Holes

Series1

Indicated Resource Estimate

Fairstar believes project is viable at 5% hematite recovery cutoff.

Hematite

Recovery

Percentage

Cutoff

Tonnes

Mt

Recovery

%

Fe

%

SiO2 %

Al2O3 %

P % LOI

%

10%

94

18

58

7.1

6.0

0.01

1.6

7%

118

16

58

7.1

5.9

0.01

1.7

5%

136

15

58

7.2

5.9

0.01

1.7

Problems with Water Usage in Processing

• Significant water required in process plant: 200kg/t ore?

• Water needs to be fresh –brackish to avoid salt contamination of backfill and hematite product

• Water drilling found only hypersaline water nearby in 30km radius; 58 000TDS to 125 000TDS.

• Reverse osmosis expensive, water too salty for RO, and waste hypersaline water disposal a problem

• Low rainfall area, with unreliable rains; dam unfeasible

• Need to source water at some distance; Eucla Basin, costly

• Need to use dry processing where possible to reduce water usage.

• Recover much of water (80% ?) for reuse

Testwork on Hematite Alluvials

• Sizing analysis of hematite alluvials indicates

minimal hematite below 250 microns.

• This ultrafine fraction makes up around 15% -

50% of alluvials ; highly variable

• This ultrafine fraction ( clay and silt) retains water

and it is very hard to recover this water for reuse

• Need to remove ultrafines by dry methods to

improve water recovery

Sizing Analysis: Av 162 Pit Samples

+6.3mm +1mm +63um -63um

Average 3.5% 25.4% 18.8% 52.3%

Min 0% 2.5% 2.3% 6.2%

Max 44.9% 82.4% 57.1% 87.9%

Includes clay samples.

Dry Processing Methods Investigated

• Dry magnetic separation of about 40% of the hematite to

reduce throughput. Magnetic fraction 60.3% Fe. Non

magnetic fraction 57.7%Fe.

• Air Classifiers to remove ultrafine fraction which has

minimal hematite, and retains water

• Fluidised air beds to remove ultrafine fraction, and abrade

surface coating

• ROTEX shaking screens to remove ultrafines

• Air jig to remove ultrafine fraction, and also reduce low

density coarse waste, reducing throughput to plant down

stream

Air Classifier

Diagram

and Results

Fluidised Air Bed Results

Carrier Air Bed : three tests reduced ultra fines (<250 microns)

from 15.9% to 3.0%, 2.4% and 1.25% respectively

Barr-

Rosin

Sample

Coarse

Fraction

>355

microns

Fine

Fraction

212-355

microns

Ultra Fine

Fraction

<212

microns

Comment

Original 80.2% 9% 10.8%

Coarse

Airbed

91.3% 6.2% 2.5% Fluidising

velocity

2m/s

Fines

Airbed

18.5%

0% 35.6% 63.3% Minor loss

of >250u

ROTEX Vibrating Screen Deck

Dry Air

Jig

Air Jig Results; Feed raw ore

Heavy Underflow Light Filter

Mass % 29.81 12.04 39.01 19.14

DMS OF % 19.4 14.6 95.7 N/A

DMS UF% 80.6 85.4 4.3 N/A

Fe2O3 % 58.84 61.51 56.98 N/A

SiO2% 7.22 5.11 8.97 N/A

Al2O3% 5.62 4.19 5.82 N/A

Air Jig Fractions

Comparison of Dry Processing Methods

Method Advantages Disadvantages

Dry Belt magnet Low Cost Only 40% of hematite

extracted

Air Classifier Simple design, very

efficient result

Possible clogging with

damp ore

Fluidised Air Bed Dries ore as well as

separating out fines

High air flow required,

so high power cost

Vibrating Screen Deck Very good removal of

ultrafines

Potential for clogging

of screens if ore damp

Air Jig Removes ultrafines,

and/or removes part of

coarse waste

May need to remove

ultrafines first to

increase efficiency

Testwork to Improve Grade of Hematite

Product

• Hematite average grade is 58% Fe, 7% SiO2, 6% Al2O3.

The silica and alumina need to be reduced, to raise the Fe

grade as each 1% Fe increase is worth about $3/t

• Mineralogy testwork shows minor very fine internal quartz

within hematite granules; not removeable

• Also shows partial silica/clay coating on some granules,

especially in pits. This can be reduced

• Testwork undertaken to ascertain how to reduce the

coating, to achieve product target of 60% Fe

Hematite Product of Laboratory

Additional Trommeling of +250um Ore

• Because the metallurgical laboratory used a small vertical blade

attritioner to clean the drill samples, testwork was undertaken with a

test trommel 1.5m in diameter to approximate full size plant conditions

to clean up the hematite.

• This can be correlated with the residence time required in a full size

scrubber

• Tests were taken with differing residence times, water/sample ratios,

chemical additives and attrition media

• Chemical additives were Claymaster (5ml per litre water),and Liqui-

Sperse with Aus Det Xtra (7.5mls and 2.5mls per litre water)

• Attrition media was 12-15mm crushed gravel, 20% of ore weight

• Results were encouraging with all DMS sinks above 59%Fe

• Attrition media and Claymaster performed best. Latter preferred

Trommel Results

Test No Duration Additives Fe % SiO2 % Al2O3%

Control 3.5mins Minimal water 59.13 5.74 6.08

W 30% 2.5mins Water 30% of

ore

59.30 5.78 6.03

W 50% 3.5mins Water 50% of

ore

59.23 5.78 5.99

L-5 5mins Water 50%

LiquiSperse and

Aus Det Xtra

59.36 5.74 6.04

C-5 5mins Water 50%

Claymaster

59.59 5.55 5.85

A-3.5 3.5mins Water 50%

Gravel 20%

59.69 5.45 5.79

Bioleaching to Reduce Alumina and Silica

Testwork by Dr P Williams (South Africa) indicates P,

SiO2 and Al2O3 in iron ore can be reduced by

bioleaching.

Tests undertaken on SHIP hematite product (0.6- 4mm)

• Fungi Aspergillus niger was used, and produces organic

acids including citric acid and oxalic acids

• Three different concentrations of fermentation medium

used, and each innoculated with 1ml of A niger; 10 million

spores

• 500g of hematite incubated at 30deg C for 10days

• Results showed significant reductions of SiO2, Al2O3,

TiO2, MgO, CaO, Na2O and NiO. Little Fe2O3 was lost

Aspergillus Niger Leach Results

Percentage Decrease Compound 1/1 Pulp Density

500g Hm in 500g

medium

1/2 Pulp Density

500g Hm in 250g

medium

1/5 Pulp Density

500g Hm in 100g

medium

Fe2O3 0.7 0.8 3.8

SiO2 10.6 33.9 22.9

Al2O3 11.4 25.0 18.2

TiO2 12.5 12.5 12.5

MgO 100 100 100

CaO 100 100 100

Na2O 72.7 90.9 90.9

K2O 5.9 17.6 5.9

P 5.9 23.5 5.9

NiO 100 100 100

MnO 0 0 0

Bioleaching with Heterotrophic Bacteria

• Bioleaching used a combination of five different bacterial cultures

• 5ml of each culture in 500ml of growth medium with 250g hematite product (0.6-4mm) from metallurgical laboratory

• Incubated at 30degrees C with agitation (150rpm) for 5 days and a second batch for 10 days

• Hematite head grade 58.630% Fe, 6.855% SiO2, 6.295% Al2O3

• Silica reduced by 16.3% in 5 days and 21.7% in 10days in +1mm

• Alumina reduced by 16.0 in 5 days and 19.7% in 10 days in +1mm

• Fe grade of +1mm increased from 58.630% to 59.628% Fe in 5 days, and up to 59.95% in 10 days. But 20% Hm now as –1mm, 52%Fe

• 20% of Fe into low grade –1mm requires new spiral separation

• Potential problem with other bacterial growth in industrial setup

• Potential problem with water usage and waste disposal -> backfill?

Results of Bacterial Leaching Element

/ Mass

Head

grade

5 Days

+1mm

5 Days

-1mm

10 Days

+1mm

10 Days

-1mm

Mass 250 g 208.45 41.55 198.33 51.86

Fe % 58.63 59.63 52.20 59.95 52.26

SiO2% 6.85 5.74 12.29 5.36 12.42

Al2O3 % 6.29 5.29 8.72 5.06 8.73

TiO2% 0.85 0.75 1.09 0.73 0.83

MnO% 0.06 0.06 0.06 0.06 0.06

MgO% 0.08 0.00 0.00 0.00 0.00

CaO% 0.07 0.00 0.00 0.00 0.00

Na2O% 0.08 0.03 0.04 0.03 0.04

K2O% 0.03 0.03 0.03 0.03 0.03

P% 0.015 0.014 0.015 0.013 0.016

Processing Pathway

Trommel Dry

Air Classifier to remove ultrafines

Dry Screen at 6mm, crush oversize to -4mm

Dry Screen at 1mm; fines to wet spirals

1-4mm to belt magnet; magnetic Hm removed

Non mags to Dry Air Jig ?

Heavy Fractions to Dense Media Separation

Recover water on belt filter