Iron Ore Holdings Makes Find Near Rio Tinto's Mesa J Mine

Iron Ore Holdings Ltd. (IOH.AU) said Tuesday it has made a large magnetite discovery within 10 kilometers of Rio Tinto PLC's (RIO) Mesa J iron ore mine in Australia's remote Pilbara region.

Drilling in a six kilometer by two kilometer area on the Mt. Dempster prospect indicates an exploration potential of between 2 billion and 3 billion metric tons, the exploration company said in a statement to the Australian securities exchange.

IOH said it is preparing for a second phase of drilling in early 2012 to define the mineral resource, and will begin planning a study to determine detailed metallurgical properties of the magnetite and practical options for mining and infrastructure connections.

The company owns a portfolio of iron ore tenements and projects in the Pilbara region of Western Australia state, all located near existing and planned mines and infrastructure. It currently has an estimated mineral resource of 933.8 million tons.

At 2329 GMT, IOH's shares were trading 0.4% higher at A$1.25 amid a decline in the broader market.

-By Robb M. Stewart, Dow Jones Newswires; [phone]; [e-mail]