Cerro Resources NL
ASX : CJO
TSX VENTURE : CJO

Cerro Resources NL

February 01, 2012 08:30 ET

Cerro Resources Upgrades and Increases Resource Estimate for Its Mt. Philp Haematite Iron Project

LONGUEUIL, QUEBEC--(Marketwire - Feb. 1, 2012) - Cerro Resources NL (ASX:CJO)(TSX VENTURE:CJO) is pleased to announce an updated Indicated and Inferred Resource for its 100%-owned Mt. Philp Haematite Iron Prospect located in Queensland, Australia. This estimate increases and partially upgrades to the indicated category the initial inferred resource of 25Mt announced October 4.

Highlights

  • Indicated Resource of 19Mt averaging 41% Fe and 38% Silica
  • In addition, an Inferred Resource of 11.4Mt averaging 34% Fe and 48% Silica
  • 63% of the resource is in the Indicated category
  • Iron/Silica distribution within the resource is consistent with material used in original metallurgical sighter test work

The Mount Philp Deposit is located in Northwest Queensland, approximately 54 kilometres southeast of Mount Isa.

The deposit occurs as a single north-northeast trending iron rich stratigraphic unit that extends over 4 kilometres within the Proterozoic Corella Formation that grades from Haematitic Quartzite through Banded Siliceous Ironstone and Siliceous Ironstone into massive Haematitic Ironstone. The ironstone is generally fine to medium grained with increasing grainsize related to haematite content. Remobilization of haematite with coarse recrystalization is evident in the vicinity of some shears.

Following preliminary drilling in 2007, Cerro Resources has now completed a detailed program of geologic mapping, surface rock-chip sampling and drill testing of the Mount Philp Deposit during 2010-2011 to enable resource estimation.

In total, 48 diamond and reverse circulation drill-holes were completed and included in the Resource over a total of 4km of strike. Drilling is located on a nominal 100 metre pattern along the strike length of the ironstone. At this stage of the program the majority of pads at the northern half of the deposit have been drilled with fans of drill holes declined at 0, 30 and 60°. In the southern half of the drilled area the drilling has stepped out to 200 metres with holes at 30 and 60°.

Drill samples were submitted to Australian Laboratory Services Pty Ltd for sample preparation and assay by XRF methods. Seventy-four independent standards have also been assayed by ALS with results within 2.5% of the manufacturer's estimated value. Sixty-nine core samples were duplicated by the laboratory as a check on sample homogeneity. Sample results are within 1%.

Surface topography was captured using airborne LIDAR. Drillhole collars were surveyed using DGPS with decimetre accuracy. Sectional interpretations of the Ironstone boundaries, as defined by drillhole intercepts and surface outcrop, and with maximum extrapolations of 50 meters, were interpreted in plan view to define the extent and geometry of the ironstone body. Sample statistics of the ironstone indicate a bimodal distribution in iron and silica with iron inversely proportional to silica. Variograms are generally poorly developed but do indicate a cross-strike range of 30 metres (comparable with the average true width of the ironstone) and an inferred strike range of around 250 metres. This justifies the use of 100 metre drill section spacing for the definition of the Indicated Resource.

Block grades for iron, silica, phosphorous, alumina, titanium dioxide and Loss on Ignition (LOI) were interpolated using an inverse distance squared interpolator acting within a geologically defined, oriented and scaled search ellipsoid. Grades were only interpolated within the interpreted ironstone boundaries. The same search and interpolation parameters were used for all models.

The resource was calculated as the sum of block volumes contained within the zones coded as Haematitic Ironstone and Siliceous Ironstone. Tonnages were calculated by applying the average zone bulk densities to those volumes.

Based on drill density, sampling protocols and grade variography 63% of the total resource fulfils the requirements of an Indicated Resource. This equates to an Indicated resource of 19Mt grading 41% iron and 38% silica and a further 11Mt, in the Inferred category, grading 34% iron and 48% silica.

Table 1: Geological Resource Summary at zero cutoff grade

Geological Boundary
Ironstone

Category

Tonne Million

Fe %

SiO2 %

P %

Al2O3%

TiO2 %

LOI %
Haematitic Indicated 12.78 48.82 27.55 0.01 1.14 0.34 0.30
Siliceous Indicated 6.33 26.47 58.91 0.03 1.61 0.47 0.29
TOTAL/avg Indicated 19.11 41.42 37.93 0.02 1.30 0.38 0.29
Haematitic Inferred 4.63 47.48 28.85 0.02 1.58 0.38 0.26
Siliceous Inferred 6.77 24.47 60.67 0.03 2.27 0.51 0.34
TOTAL/avg Inferred 11.40 33.82 47.74 0.02 1.99 0.46 0.31

The Iron and Silica distribution within the resource is consistent with the material used in original metallurgical sighter test work that produced a 68%-Fe average product at 77% recovery and 1.5% silica by un-optimised flotation (Refer Announcement: 22 December 2010).

Within the next 45 days, Cerro Resources will release a National Instrument 43-101 compliant technical report, which will include all of the details of the indicated and inferred resource estimate. This report will be filed on SEDAR.

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 (as it relates to exploration results and mineral resources), who is a Chartered Professional Geologist and Member of the Australasian Institute of Mining and Metallurgy. Mr Skeet is the Chief Operating 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, actively exploring the Namiquipa silver project in northern Mexico, and commencing exploration on the Espiritu Santo gold/silver project in Jalisco. 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, and 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. 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.

To view the tables and figures associated with this press release, please visit the following link: http://media3.marketwire.com/docs/120201_cjo_tables_and_figures.pdf.

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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