Baobab Resources has reported further positive drilling results from Monte Muande in Mozambique's Tete province and said it has now earned a 60% stake in the project.

The group has now completed Stage 1 of the JV agreement with North River Resources.

Baobab can raise its stake in Monte Muande in two further stages to 75% and 90% respectively, provided North River chooses not to maintain its 40% stake.

During the latter half of 2011, Baobab completed 2,000 meters of diamond drilling in 10 holes at Monte Muande, intersecting broad packages of magnetite and phosphate mineralization and finding iron grades of up to 69%. Test work is currently underway on samples of the magnetite and phosphate mineralization.

Baobab also took 76 trench samples to test material overlying the deposit which may represent a potential source direct shipping ore requiring little or no beneficiation. Sizing and analysis is currently underway.

Mr Ben James MD of Baobab said that "It is with great pleasure that we are able to present the results of the initial drilling campaign on this exciting prospect. 69% iron is an exceptional grade and, together with the possibility of producing a complementary high grade rock phosphate concentrate, immediately demonstrates the value of this JV in the company's portfolio."

The Monte Muande magnetite phosphate deposit is located 25 kilometers to the northwest of the provincial capital of Tete. The international highway to Zambia passes within 3 kilometers of the project. The deposit is hosted in a carbonatite and was explored during the 1980s by the Geological Institute of Belgrade.

Using the GIB data sets in conjunction with more recent soil geochemistry and aeromagnetic surveys completed by Omegacorp, consultants Coffey Mining Pty Limited calculated an exploration target of 200 to 250 million tonnes to an average depth of 40 meters

Source - Proactive Investors

(www.steelguru.com)