Murchison Metals Limited - Update On Production Capacity And Stage One Operation Of Jack Hills Expansion Project

14:39 AEST Mar 8, 2011 ABN Newswire (C) 2004-2011 Asia Business News PL. All Rights Reserved.

Perth, Australia (ABN Newswire) - In its ASX announcement on 3 March 2011, Murchison Metals Limited (ASX: MMX) (PINK: MUMTF) stated that the flowsheet selected for the Jack Hills Expansion Project (JHEP) would deliver a base production capacity of +20 million tonnes per annum of premium quality iron ore products, comprising a mix of magnetite pellet feed concentrate, a blended magnetite/hematite concentrate and direct shipping grade (DSO) lump and DSO fines.

Murchison would like to clarify that the +20mtpa capacity referred to above relates to the minimum expected output of concentrates from the proposed two module concentration facility. Each individual module will have a nominal concentrate production capacity of at least 10mtpa.

In addition to the minimum +20mtpa of concentrates expected to be produced by the concentration facility, the JHEP will also produce DSO lump and DSO fines, the annual volume of which will be determined by the mine plan for the JHEP.

As announced last week, the development plan for the JHEP also envisages the potential addition of a third concentrate module which would lift concentrate production alone to more than 30mtpa. The timing of a third module being added will depend on various factors, including market conditions.

JHEP concentrates will be premium quality products, with the magnetite pellet feed concentrate expected to average in excess of 68% Fe, and the blended magnetite/hematite concentrate expected to average in excess of 64% Fe.


Jack Hills Stage 1 Operations Update

Further to Murchison's announcement on 22 February 2011 about rain-related disruptions to Stage One operations at the Jack Hills mine, the Company advises that mining and haulage operations remain suspended due to regional flooding and road closures.

Subject to an inspection of the main access road, and provided there is no further heavy rain, mining operations are expected to resume in the near future. The disruption is currently expected to result in the deferral of two shipments scheduled for export from the Geraldton in March, as stated previously.

Murchison will advise the market as soon as a resumption of operations is possible.


About Murchison Metals Limited:

Murchison is an Australian ASX-listed company and is included in the S&P/ASX 200 Index.

Murchison is a 50% shareholder in Crosslands Resources Ltd ('Crosslands') which is the owner of the Jack Hills iron ore project located in the mid-west region of Western Australia. The remaining 50% of Crosslands is held by Mitsubishi Development Pty Ltd ('Mitsubishi'), a subsidiary of Mitsubishi Corporation, Japan's largest general trading company.

The Stage 1 Jack Hills project is currently producing up to 1.8 Mt of high grade iron ore per annum. Feasibility studies for a major Stage 2 expansion are well advanced.

In addition, Murchison has a 50% economic interest in independent infrastructure business, Oakajee Port and Rail (OPR). The remaining 50% economic interest in OPR is held by Mitsubishi. OPR's integrated port and rail development proposal will provide world class logistics services to miners (including Crosslands) and other potential customers in the mid-west region of WA.

In addition to its investments in Crosslands and OPR, Murchison is actively exploring growth opportunities in iron ore, coal and manganese in accordance with its approved corporate strategy.



Contact:

Paul Kopejtka
Executive Chairman
Murchison Metals Ltd
Tel: +61-8-9492-2600

John Phaceas
Manager External Relations
Murchison Metals
Tel: +61-8-9492-2600
Mob: +61-411-449-621

Email: info@mml.net.au
http://www.mml.net.au