The Posse iron project is located in the Iron Quadrilateral region of Minas Gerais state, Brazil, 30km from the regional capital and iron ore mining centre of Belo Horizonte. Crusader acquired the Posse Iron Project in September 2007.

The Posse Iron Ore deposit is hosted within Itabirite banded iron formation (BIF) and contains some hematite mineralisation.

Crusader completed a total of 11 diamond drill holes for a total of 852 metres late in 2007. Drilling tested a 300 metre long zone of high grade iron mineralisation to depths up to 100 metres below surface. The drilling confirmed near surface widths of high grade hematite and itabirite ore. Highlights from the drilling included:

27.30m @ 50.49% Fe from 0m in PODH005
18.90m @ 62.58% Fe from 21.15m in PODH009
15.55m @ 57.66% Fe from 27.15m in PODH010

In January 2009 Crusader released a Mineral Resource comprising a total Indicated plus Inferred Resouce of 36 million tonnes at an average iron grade of 43.5% (Fe) with low associated contaminant elements. The resource was prepared by the international consulting gropu Coffey Mining. The details are indicated below.

Table 1.  2009 Mineral Resource table for Posse Iron Project 

The Inverse Power of distance (IDW2) method of estimation has been used to obtain estimates of iron (Fe), silica (SiO2), aluminium (AIO3), manganese (mn), (P) and loss of ignition (LOI) grades. The grade estimate has been classified as an indicated and Inferred Mineral Resource based on guidlines setout in the JORC Code (2004). No cutoff was applied to the estimation.

Grade was estimated within a mineralised envelope based on geological interpretation, measured bulk density values and drill assay results from the SGS Geosol Laboratory located in Belo Horizonte - Brazil. 

The information in this report that relates to Mineral Resources is based on and accurately reflects, information compiled by Mr Bernardo Viana who is a full time employee of Coffey Mining Pty Ltd and a Member of The Institute of Geoscientists. Mr Viana has  sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.  Mr Viana consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.

Coffey Mining completed a scoping study into the mining, geology, marketing and economics of Posse.

Crusader is implementing the initial stage of a 2 stage mining development at Posse with production commencing during the first half of 2010. The initial production rate under a Brazilian trial mining authority is for 300,000 tonnes per annum, with concentrates sold to local pig iron smelters in the Iron Quadrilateral.

Planning and evaluation is on-going into an increased production rate, forecast to be in the range 800,000 to 1,000,000 tonnes per annum, following approval of a full Mining Lease.

Crusader is seeking to implement mining at Posse using a 2 stage strategy- initially at a 300,000tpa capacity and upgrading to the planned capacity of 800,000 - 1,000,000tpa, subject to the results of the scoping study.

The metallurgical work that has been completed so far at Posse has confirmed that simple beneficiation (gravity separation and or magnetic separation) of the itabarite ore can produce excellent recoveries. The results show a high grade product (60-68% Fe) can be achieved for the sinter and pellet feed fractions and Crusader also expects to get good recoveries from the coarse or lump fraction from the high grade hematite mineralisation. Further work to further define the optimal beneficiation route is underway.

The Iron Quadrilateral

The Iron Quadrilateral is Brazil's most important iron ore producing region and hosts the majority of Brazil's 61 billion tonnes of iron ore reserves. CVRD, Brazil's major iron ore producer, mined 182 million tonnes of ore during 2006 from five separate mines in the Iron Quadrilateral.The Posse project is located adjacent to national highway 381 and 30km from the regional capital of Belo Horizonte. Belo Horizonte is a city of 2.5 million people and provides the majority of the Iron Quadrilateral's infrastructure needs.

A total of 9 large steel mills and over a hundred smaller mills draw feed from the large and many small mines that operate within the region. Iron ore and steel are also transported by rail to ports near Rio de Janeiro and Vitoria from where it is shipped throughout the world.