Bulk minerals explorer Sheffield Resources today announced the grant of a key tenement covering its Dampier mineral sands project near Derby in the Kimberley region of Western Australia.

Exploration licence E04/2083, is located approximately 60km west of the expanding port of Derby and lies outside the recently proclaimed Kimberley National Heritage Estate listed area.

Together with 3 adjacent tenements under application, the Dampier project covers 1,314 km2 of prospective mineral sands ground.

The Dampier project area was explored by Rio Tinto ("Rio") between 2004 and 2009. Rio completed four broadly spaced aircore drill traverses, identifying two zones of significant heavy mineral concentration: a large, shallow "eastern zone", named Thunderbird, and a smaller, deeper "western zone", named Argo.

Significantly, the mineral assemblage includes zircon grades of up to 11.4%.

Managing Director, Bruce McQuitty said the Dampier project represents a large scale mineral sands play with excellent heavy mineral grades and potentially high value heavy mineral assemblages.

"The Dampier project has significant size, scale and grade potential and is a key addition to Sheffield's mineral sands project portfolio which already includes the large McCalls project and smaller projects with near-term development potential in the North Perth Basin."

The heavy mineral concentrations are hosted by shallowly-dipping and deeply weathered sand units of the Jowlaenga Formation which occurs stratigraphically below the Broome Sandstone and its locally silcreted equivalent, the Melligo Quartzite. Sizing analysis indicates that the heavy mineral is fine-grained and typical of large shallow offshore mineral sand deposits.

The fine grained nature of the mineralisation and variable iron cementation and hardness may present some metallurgical challenges (lower recoveries) however these are offset by the high heavy mineral grade and the potentially high value zircon, rutile and leucoxene-rich mineral assemblage.

Exploration potential and further work

The Thunderbird prospect is located within a 15km by 6km coincident geochemical, drill hole and thorium radiometric anomaly. This target has been tested by only four lines of drilling. The mineralisation remains open in all directions. The Argo prospect is concealed by shallow aeolian sand and has been traversed by a single line of aircore holes. The mineralisation is open along strike in both directions.

Sheffield intends to complete Aboriginal Heritage Surveys over the project as soon as possible, ahead of an aircore drilling programme of sufficient density to enable estimation of an inferred resource and to provide representative samples for metallurgical work. Due to the impending onset of the wet season it may not be possible to complete this drilling until May 2012.

The Company has agreed to issue 250,000 options (exercise price of 44c, expiry 3 years) to a consultant in consideration for identifying this opportunity for the Company.