Magnum Mining & Exploration will undertake shallow drilling at its Buena Vista Green Pig Iron Project mine site in Nevada, USA. The drilling campaign is designed to test the lateral and depth extent of high grade massive magnetite outcrops with the aim of outlining a possible Direct Shipping Ore (DSO) source. DSO is of sufficiently high grade to not require any beneficiating.

It only needs to be crushed and sized to meet lump or fines specifications. The Buena Vista Green Iron Project area is rich in high grade massive magnetite outcrops. While these areas are mostly included in the Project's Mineral Resource Estimate of 232Mt @ 22.6% DTR and 18.6% Fe2 separating them out as a possible stand-alone, high grade DSO sources may deliver early production potential for the project.

Geochemical surface rock chip sampling shows iron grades ranging up to 68% Fe in these zones. The campaign will be a maiden drill testing of the Iron Horse Prospect, an area of extensive massive magnetite outcrop that is geographically removed from the current resource area. This area is included in the recently announced Exploration Target Estimate of 450 to 540Mt @ 15 to 22% Fe1.

A local drilling company has been contracted to drill a series of relatively shallow RC holes. The rig is a buggy mounted unit to deal with the challenging snow and rain conditions that have persisted over the project making access with heavier rigs impossible. Drilling is due to start in April and take at least two weeks to complete.

Results should be available six weeks or so after drilling completion, depending on lab congestion. Buena Vista Iron Deposit is located approximately 160km east-north-east of Reno in the mining friendly state of Nevada, United States. It was discovered in the late 1890's and in the late 1950's to early 1960's around 900,000 tonnes of direct shipping magnetite ore with an estimated grade of 58% Fe was mined.

In the 1960's, US Steel Corporation acquired the Buena Vista Project and carried out an extensive exploration program including 230 diamond drill holes and considerable metallurgical test work. Richmond Mining Limited, an ASX listed company, acquired Buena Vista in 2009 and commenced a detailed exploration program culminating in a definitive feasibility study in 2013. A key component of these studies was extensive investigation of the optimal logistics plan for the deposit's development.

This included the negotiation of in-principle agreements with existing rail and port operators and the securing of all major mining permits. Detailed costings were completed on the trucking or slurry pipeline options to deliver the concentrate to the rail head located some 50 kilometres from mine site. A significant decline in iron ore prices to less than USD 50/tonne caused the then proposed development of Buena Vista to be deferred.

Geology The Buena Vista Project magnetite deposits are the product of late-stage alteration of a localised intrusive local gabbro that resulted in intensely scapolitised lithologies and the deposition of magnetite. The most well-known example of this type of magnetite mineralisation is the Kiruna magnetite deposit in Sweden, which has been in production since the early 1900's. The distribution and nature of the magnetite mineralisation at Buena Vista is a function of ground preparation by faulting and fracturing, forming a series of open fractures and breccia zones. These ground conditions produce variations in mineralisation types from massive pods grading +60% magnetite to lighter disseminations grading 10- 20% magnetite.

Metasomatic magnetite deposits such as those at Buena Vista have important positive beneficiation characteristics over the other main type of magnetite deposit which is a banded iron hosted magnetite, also known as a taconite. The Buena Vista ore is of magmatic origin and as a consequence is coarser grained and softer than banded iron hosted ores. Industry standard crushing, grinding and magnetic separation produces a concentrate grade of +67.5% Fe with very low levels of impurities.