Ferrum Americas Mining Inc.
TSX VENTURE : FEM

Ferrum Americas Mining Inc.

January 19, 2012 16:37 ET

Ferrum Americas Mining Receives Positive Preliminary Metallurgical Test Results from Cerro Rojo Iron Ore Project

TORONTO, ONTARIO--(Marketwire - Jan. 19, 2012) - Ferrum Americas Mining Inc., (TSX VENTURE:FEM) ("Ferrum" or the "Company") is pleased to announce the receipt of positive results from preliminary magnetic separation metallurgical test work on the Company's Cerro Rojo iron ore project, located in eastern Bolivia, approximately 55 kilometres west of Puerto Suarez and the Hidrovia River system near Corumba, Brazil.

Samples totalling 157 kilograms were collected from four surface locations along approximately 500 metres of strike across the scarp formed by the Cerro Rojo Neoproterozoic banded iron formation. Samples were sent to Nomos Laboratory, an ISO 9001 certified assay and metallurgical testing company based in Duque de Caxias, Brazil, for assay and basic magnetic separation tests.

Highlights from this preliminary test work are as follows:

  • Average head grade of the samples was 54% Fe;
  • The ore can be upgraded using simple magnetic separation techniques with low yield loss.
    • At a grind size of 150 Microns (100 mesh) a product of 63.33% Fe was obtained with a 78% mass yield
    • At a grind size of 106 Microns (150 mesh) a product of 63.79% Fe was obtained with a 72.71% mass yield
    • At a grind size of 75 Microns (200 mesh) a product of 67.6% was produced with a 71% mass yield.

(See tables below for specifics of each test result and a sample location map.)

The preliminary test work confirms expectations that iron ore from Cerro Rojo will liberate well and can be upgraded to produce a product of attractive iron grade. Based on the sample results, an excellent quality iron concentrate was produced at a relatively coarse grind size and with a high mass yield.

While preliminary, these results are significant in determining how iron ore can be upgraded and encouraging in terms of the efficiency with which this can be achieved. Based on these positive results, Ferrum intends to conduct a second phase and more comprehensive study based on representative samples from across the entire deposit and from drill core later this year.

58% Iron Ore Benchmark

One of the most important developments last year in the iron ore physical market has been the growing acceptance of 58% benchmark iron ore price indices. The new Metal Bulletin 58% Iron Ore price Index, one of several in the marketplace, reflects the steel industry's growing acceptance of and demand for 58% iron ore product.

This development is of particular significance to Ferrum Americas as the Cerro Rojo project, which grades in excess of 50% iron, is very close to this new benchmark grade and creates a potential for producing a Direct Selling Ore ("DSO") product.

"We are extremely pleased with the results from our first metallurgical test work at Cerro Rojo and combined with the growing demand for 58% iron product, provides Cerro Rojo with a broader range of potential iron ore products which can be developed for sale" said Nick Tintor, President and CEO of Ferrum.

2012 Program Objectives

Ferrum's operating objectives for this year include the following:

  • Complete sufficient drilling leading to the completion of a NI 43-101 compliant resource estimate by the fourth quarter of 2012.
  • Complete additional metallurgical test work.
  • Complete preliminary logistics analysis of the rail and river barge potential for low cost shipping of ore iron ore products to market.

About Ferrum Americas Mining

Ferrum has the right to acquire a 98% interest in the Cerro Rojo iron ore project in eastern Bolivia. Cerro Rojo is exposed as a 4 km long magnetite and hematite-bearing iron formation grading in excess of 50 percent iron (according to historic reports on surface sampling prepared by Rio Tinto and verified by Ferrum, see Company filings).

The Cerro Rojo, El Mutun and Urucum deposits are located in one of world's greatest Neoproterozoic iron and manganese provinces straddling the border of Bolivia and Brazil.

The project is accessible by paved and all weather roads, 55 km west of Puerto Suarez on the upper reaches of the Hidrovia river system, near Corumba, Brazil. Established infrastructure includes a railway and gas-pipeline 12 km by road from the site.

The Hidrovia is currently used by iron producers in the Mutun-Urucum iron district to ship product via cost efficient barge convoys to the Atlantic.

On receipt of drilling permits, Ferrum is planning an aggressive exploration program designed to advance Cerro Rojo towards feasibility and production.

Qualified Person

Laurence Curtis, PhD, P.Geo., is a Qualified Person as defined by National Instrument 43-101 and has read and approved the technical content of this press release.

Forward Looking Statements

This news release may contain forward-looking statements that are based on Ferrum Americas Mining Inc.'s expectations, estimates and projections regarding its business and the economic environment in which it operates. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements and readers should not place undue reliance on such statements. Statements speak only as of the date on which they are made, and the Company undertakes no obligation to update them publicly to reflect new information or the occurrence of future events or circumstances, unless otherwise required to do so by law.

To view the test results and the map associated with this press release, please visit the following link: http://media3.marketwire.com/docs/TestResults_Map.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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