Drill survey reveals iron ore

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Iron sands exploration company Trans-Tasman Resources says a drill survey of a small part of a licence area off the Wanganui coast has revealed inferred resources of 100 million tonnes.

The joint ore reserves committee, or Jorc survey, is the first of its kind in an offshore area, the company said.

Trans-Tasman says that while still at a very early stage, it had greater confidence to extrapolate total potential resources of up to 5 billion tonnes of iron ore in its three permit areas off the Wanganui and Taranaki coast.

Iron ore is currently around US$170 a tonne. The company has plans for a sharemarket listing to raise $300 million to $400 million to start production using an offshore dredging operation.

"If we could prove up the sort of volumes that could support a dredge mining operation - we'd like to get a few hundred million tonnes under our belt that gives us confidence to raise capital," executive chairman Bill Bisset said.

The Jorc study was significant, he said. "It's a step change from someone saying there's lots of iron sand there."

The company had spent millions of dollars on the survey which involved drilling in water 10m to 40m deep.

Chief executive Paul Berend said the Jorc report was based on analysis of sand cores recovered from shallow drilling during the past summer and validated from aeromagnetic survey.

Berend said given the vast expanse of underwater black sand "we can expect to prove an ocean of iron ore".