Fortescue Metals Group rose by as much as 26% today after the iron producer said it made a massive new iron ore discovery in the Pilbara region in Western Australia.
Fortescue said it had found iron ore totalling more than one billion tonnes in the Serenity area at its Solomon Project area.
Within this deposit Fortescue has defined 337 million tonnes of channel iron deposit, a major source of cheap, high grade iron ore, averaging 56.7 per cent ferrous metal (metal that contains iron).
"Fortescue is continuing to drill equally prospective targets in the eastern portion of the Solomon Project area and expects to announce additional resources in that area before Christmas."
Fortescue said the discovery followed a drilling programme aimed at providing sufficient resource with its Chichester deposits to support its planned production expansion to 200 million tonnes per annum.
"Metallurgical test work has commenced and preliminary results suggest that mineralisation is responding positively but further work is required to determine detailed process flow sheets, expected recoveries and product characteristics."
Fortescue said this work is ongoing.
This new discovery brings Fortescue one step closer to becoming the third major iron ore miner in the Pilbara region, after Rio Tinto had ruled supreme in the area for decades.
Shares in Fortescue rose by 9.5 cents to close up at $60.98.
