AAP
Fortescue Metals Group Ltd has a lot of work to do to prove-up its 20 billion tonne iron ore resource estimate at its tenements in Western Australia's Pilbara region, an analyst says.
Fortescue has an actual proven resource base of 6Bt that complies with Australia's mineral reporting code, JORC, which is embedded in ASX listing rules.
Fortescue executive director Russell Scrimshaw was quoted in a media report on Thursday as saying the company had up to 20 billion tonnes (Bt) of iron ore on its vast landholdings.
This was similar to comments by chief executive Andrew "Twiggy" Forrest at Fortescue's annual general meeting in November, although an accompanying presentation released to the Australian stock exchange (ASX) that day said the 20 Bt figure included hypothetical estimates.
Hartleys resources analyst Andrew Muir said non-JORC resource estimates were considered acceptable for iron ore because they were relatively straightforward ore bodies.
However, a lot of drilling needed to be done to make Fortescue's 20Bt estimate JORC-compliant.
"They can work out the areal extent (area) of these resources and then make an assumption on the thickness of them, and based on that, they can work out what the potential is," Mr Muir told AAP.
"But you still need to go and drill them out.
"By giving an estimate of what you think is there, you give people an idea of the scale of what you've got."
