Cerro Resources NL
ASX : CJO
TSX VENTURE : CJO

Cerro Resources NL

July 05, 2011 10:21 ET

Cerro Resources: Mt Philp Haematite Iron Prospect Initial Diamond Drill Results

LONGUEUIL, QUEBEC--(Marketwire - July 5, 2011) - Cerro Resources NL (ASX:CJO)(TSX VENTURE:CJO) is pleased to announce initial diamond drill results for its 100% owned Mt Philp Haematite Iron Prospect located in Queensland, Australia.

HIGHLIGHTS:

  • Initial 6-hole northern section drill results:

    • average of 52.3m @ at 50.6% Fe from at/near to surface, including;

    • 95.5m @ 52.2% Fe from 0.7m below surface; and

    • 67.7m @ 50.2% Fe from surface; with

    • In situ silica content within industry norms (26.2% SiO2average);

  • Sighter flotation tests (December 2010) achieved a near maximum of 68% iron for the haematite concentrate;

  • Results from most northerly 1km (approx) of previously identified 3.7km strike length;

  • Further 6 holes completed in northern and central project areas – some assays currently pending;

  • Second drill rig to commence in July;

  • Partial inferred resource estimate for northern section of project targeted for Dec quarter 2011;

In 2010 a geologic mapping and sampling program of work was completed to assess the variation in iron content across the Mt Philp outcrop and to test for contaminant elements. This identified Mt Philp as a potentially significant ironstone project. Subsequent preliminary test work demonstrated the ability to upgrade the material to an average of 68% iron content with average recovery of 77% through a simple crush, grind and flotation process and confirmed there are no deleterious elements apparent.

Diamond drilling commenced at Mt Philp in late March 2011 and is anticipated to continue the whole of the calendar year.

The objective of this program is to gain a better knowledge of the geometry, the geology and grade trends over the whole of the Mt Philp ironstone body and to define a resource.

To view the photo please visit the following link: http://media3.marketwire.com/docs/Photo_1_0705.pdf

To date 12 holes have been completed for a total of 1,000 metres. Drilling continues.

Early holes have been drilled on nominal 100 metre spacing whilst logistical issues of access and water supply were finalized. Later holes have been stepped out to nominal 250 metre spacing. The planned drill pattern to support an Indicated Resource study will be 100 metres along strike and 25 to 50 metres down dip.

The first six holes all intersected significant zones of massive haematite with lesser intervals of siliceous haematite. The average drill interval over the 6 holes is 52.3 metres for an average grade of 50.6% iron (Fe) and 26.2% silica (SiO2). These initial drill campaign assay findings conform with previous indicative iron content analysis in the range of 45 – 61% (average 53%) iron content which beneficiated to 68% iron and 1.5% silica. (Refer to the Company's announcements of 15 November 2010 and 22 December 2010).

To view the photo please visit the following link: http://media3.marketwire.com/docs/photo_2_0705.pdf

An inferred resource estimate for the northern section of the project is targeted for the December quarter 2011.

The next phase of metallurgical test work will seek to optimise grind size and iron recovery to concentrate whilst keeping the silica content in line with industry acceptable levels.

Details of drillhole location and assay results follow in Tables 1 and 2.

Table 1 Drillhole Location Data
Azimuth
Hole Easting Northing Rl (GDA54) Dip Total Depth
MP-001 390282 7680698 428 113 60 43.9
MP-002 390259 7680701 423 111 60 77.4
MP-003 390237 7680604 433 121 60 85.6
MP-004 390277 7680774 422 98 60 46.9
MP-005 389993 7680176 447 96 60 102.3
MP-006 389993 7680176 447 96 30 75.6
MP-007 389922 7679867 479 126 60 95.3
MP-008 389922 7679867 479 112 30 50.4
MP-009 389903 7679665 501 126 30 126.9
MP-010 389699 7679439 507 126 30 71.6
MP-011 389699 7679439 507 121 60 94.1
MP-012 389641 7679194 512 128 30 75.9
MP-013 389641 7679194 512 128 60 in progress

Table 2 Summary Assay Data
Length
Hole From To (m) Fe% SiO2%
MP-001 1 20 19 57.1 16.9
including 13 19 6 60.6 13.1
MP-002 12 64 52 52.7 21.2
including 12 42 30 60.2 13.6
MP-003 10.6 77.2 66.6 45.4 33.1
including 10 22 12 55.9 19.7
and 69 77 8 57.4 17.2
MP-004 14.9 28.1 13.2 49.3 27.9
MP-005 0.7 96.2 95.5 52.2 24.6
including 22 61 39 57.5 16.9
MP-006 0 67.7 67.7 50.2 27.7
16 53 37 55.1 20.8
MP-007 No intersection – horizontal drilling to test
MP-008 No intersection – horizontal drilling to test
MP-009 Assays pending
MP-010 Assays pending
MP-011 Assays pending
MP-012 Assays pending
MP-013 In progress

Figure 1- Location Map: http://media3.marketwire.com/docs/figure1_0705.pdf

Figure 2 - Stacked Long Section showing Drillhole Locations & Assay Results: http://media3.marketwire.com/docs/Figure2_0705.pdf

Figure 3 - Prospect Location: http://media3.marketwire.com/docs/Figure3_0705.pdf

Competent Person/Qualified Person

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr John Skeet (as it relates to process related material), who is a Member of the Australasian Institute of Mining and Metallurgy and Mr Trevor Leahey , who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Skeet is the Chief Operations Officer of Cerro Resources NL and Mr Trevor Leahey is a consultant to Cerro Resources NL. They have sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and "qualified persons" as this term is defined in Canadian National Instrument 43-101 ("NI 43-101"). Mr Skeet and Mr Leahey consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

About Cerro Resources

Cerro Resources is a precious and base metals exploration and development company. The Company is currently focused on Mexico where it is developing the Cerro del Gallo gold/silver project in the central state of Guanajuato, Mexico and has commenced exploration on the Namiquipa silver project in northern Mexico. It also maintains an active working focus on the Mt Isa, Queensland, region where it is exploring the Mt Philp haematite project and it holds an interest in the Kalman molybdenum, rhenium, copper project.

Additional information about the Company is available on the Company's website at www.cerroresources.com and on SEDAR.

Forward-Looking Information

This news release contains certain "forward-looking information" under Canadian securities laws. All statements that address future plans, activities, events or developments that the Company believes, expects or anticipates will or may occur are forward-looking information. Specifically, this news release contains forward looking information about the completion of the potential to produce a saleable iron ore product, the plans to increase the iron recovery and the planned drilling program and plans to complete a resource estimate. Forward looking information is based upon assumptions by management that are subject to known and unknown risks and uncertainties beyond the Company's control, including risks related to mining exploration and the availability of financing for companies such as the Company. There can be no assurance that outcomes anticipated in the forward looking information will occur, and actual results may differ materially for a variety of reasons. Accordingly, readers should not place undue reliance on forward-looking information. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking information, except as may be required by law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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