Frances Creek

Our Company

Frances Creek

Territory Resources’ 100%-owned Frances Creek hematite iron ore mine is located 200km south of Darwin near the township of Pine Creek and 15km from the Adelaide-Darwin rail line.

Territory commenced production at Frances Creek in May 2007, and made its first shipment of iron ore to China in September 2007 – the first iron ore shipment from the Port of Darwin in more than 30 years.

Ore is mined from a series of open pits using conventional drill, blast, hydraulic excavator and truck methods and then crushed into a lump or fines product specification, transported to a rail siding and then loaded onto trains for transportation to the Company’s stockyard at Darwin Port.

Ore from Frances Creek is sold via a life-of-mine marketing agreement with the Company’s major shareholder, Noble Group, a global leader in supply chain management. Noble plays a key role as intermediary in the supply chain of iron ore into China, and currently trades around 20 million tonnes annually into the Chinese market.

In November 2008 Territory initiated a major drive to increase efficiency at Frances Creek, aiming to deliver consistent production of over 2 million tonnes of iron ore per annum and targeting a long term operating cost of US$50 per tonne.

This involved a comprehensive “Pit-to-Port” review of the entire mining operation, and delivered strong results with the Company now exporting at an annualised rate of 2.2 million tonnes of high grade lump and fines product per annum at a cost of US$55 per tonne. Territory is continuing to implement new initiatives to further drive efficiency at Frances Creek.

As at November 2009, total Indicated and Inferred Resources at Frances Creek were 9.5 million tonnes at 59.4% Fe with Probable Ore Reserves of 4.6 million tonnes at 59.9% Fe.

To assist in extending the current level of reserves and the operating life of the mine, Territory has initiated a three-part mine extension plan. This includes:

Undertaking a comprehensive gravity survey over all potentially prospective tenements in the region. Early exploration programs at Frances Creek were based upon either outcropping iron ore or the use of traditional drilling programs. Since 2006 airborne radiometric, magnetic, and electromagnetic surveys have been used for extensive targeting and drilling. During 2008 and 2009 a comprehensive review of all surveys and previous targeting was conducted to successfully delineate significant resource increases over the known ore bodies. In 2010 the proposed gravity survey may identify potential additional resources to increase the economic life of the mine.
Developing a sales program for low to moderate-manganese iron deposits within the Frances Creek area. This specifically includes the Miller’s Deposit, with a JORC-compliant Indicated Resource of 1.28 million tonnes of mineralisation at 53.15% Fe and 4.55% Mn. Initial discussions with the Noble marketing team regarding the saleability of this material suggest that it is highly probable a suitable market position can be confirmed. These low to moderate-manganese deposits have previously been separately reported in the reserve statements, and will only be included once a confirmed production program has been completed that matches required product specifications for sale to selected steel mills in China.
A review of all low grade iron ore stockpiles at the Frances Creek minesite with grades ranging from 48% to 52% Fe. When reviewing these stockpiles for potential processing, appropriate metallurgical beneficiation programs will be reviewed including actual upgrading costs. As Territory already has much of the necessary infrastructure already in place and with recent improvements in iron ore prices, the Company believes that these lower grade stockpiles may add to the economic life of the mine – even with a higher operating cost.