First Iron is the parent company of a mineral assets development and management group, which was established in order to develop the large iron ore deposits of the north side of the prospective Valerianov trend in the Kurgan region of the Russian Federation. The Kurgan region, located in the south of the Urals region near the border with Kazakhstan, has well-established infrastructure and transport links providing ready access to both local and international steel markets, and has been explored for many years but remains largely undeveloped as an iron ore province with licences only recently starting to be auctioned and acquired by First Iron. The Valerianov trend is a well know iron ore producing belt which hosts several producing iron ore mines located south of the Russian border.
First Iron holds two 25 year exploration and production licences on the Valerianov trend, Petrovskoe and Glubochenskoe South, which contain significant iron ore deposits. The Petrovskoe deposit contains a JORC Code compliant inferred magnetite resource of 596.7 mt from which the Directors intend to build a 15Mtpa underground iron ore project, to produce 4.5Mtpa of 62%+ Fe concentrate, with production scheduled to commence at the end of 2015. The Glubochenskoe South deposit contains a JORC Code compliant indicated and inferred magnetite resource of 64.8 mt and oxide resource of 29.2 mt.
The Company intends to develop the Petrovskoe project through to a Bankable Feasibility Study and other supporting environmental studies and to undertake 12 month drilling programme at Petrovskoe, scheduled to commence in September 2012. In addition, the Company will also focus on developing the Glubochenskoe project through a smaller exploration drilling programme at Glubochenskoe South, and the acquisition of Glubochenskoe North. The Directors believe that the Glubochenskoe deposits will ultimately be capable of supporting an additional 14 mtpa underground iron ore mine, to be developed subsequent to Petrovskoe.
The Directors believe that the acquisition of the Petrovskoe and Glubochenskoe South licences has provided the Group with a significant opportunity to establish a first mover advantage in opening up a region which, through its prospectivity, strategic location and well established infrastructure, they believe has the potential to develop into a major new iron ore province inside a well know steel producing region and with access to Northern Chinese steel mills.