During the 2006-2007 licence reporting year (Year 16), on renewed EL 3516 Middleback Range, incoming new licensee OneSteel determined from a review of BHP Billiton's drilling database that some 3.1 Mt of JORC 'inferred' category iron ore (haematite) resources could exist in the vicinity of the hitherto unworked Iron Chieftain deposit. It was hoped that this brownfields target might represent a ready-made opportunity to define additional haematite resources and reserves that could be earmarked for export. Also during this year, OneSteel commissioned technical consultants RSG Global to review the exploration potential of the greater Middleback Range region. RSG re-interpreted all of the existing gravity and magnetic survey data to generate a new solid geology model for the entire region, covering both EL 3516 and all of the mining leases. This model related the observed geophysical responses to known mapped lithostratigraphic units and mineral deposits, with the aim of extrapolating these relationships into the covered basement. 27 mainly iron-related targets were identified within EL 3516, of which 8 were given high priority, while 6 of ten targets situated on five eastern Middleback MLs were given similar high ranking for planned resource development drilling. A number of possible non-ferrous mineral targets were inferred where gravity anomalies exist adjacent to cross-cutting structures and dolerite dykes. As at 30 June 2007, according to an estimate prepared by consultant Coffey Mining, OneSteel had 27.9 Mt of haematite reserve, grading 62.3% Fe at contaminant phosphorus content < 0.06% P, from amongst a haematite resource base of 91.7 Mt grading at 59.5 %.Fe. Of this resource base, two-fifths was in the JORC “inferred” category, which meant that further resource definition drilling and sampling would need to take place prior to scheduling and extraction. Further analysis by Coffey Mining of the company's resource and reserve statement revealed that some 38.8 Mt of haematite resource, grading 60.7 % Fe and in the “inferred” resource category, lies in the vicinity of the Iron Monarch, Duke, Duchess, Baron and Knight mining areas and pits. This figure included an inferred haematite resource of 6.1 Mt at 60.4% Fe identified at Iron Chieftain, that does not lie within either an active or historically mined area. Overall therefore, 32.7 Mt of the inferred readily accessible haematite resource was not within the current pit designs, and presented an immediate target for resource and reserve development. Accordingly, late in 2007 OneSteel commenced Project Connelly, initially aiming to bring 20 Mt of haematite resource within EL 3516 into the JORC 'proven reserve' category as soon as possible. In order to achieve this goal, the company sought (1) to re-optimise its present mining operations; (2) develop new resources and reserves through exploration; and (3) extract remnant resources from historically mined areas such as Iron Monarch and Iron Baron. Twenty high priority prospects located with the EL proper, plus another ten situated within Mining Leases, were scheduled for drilling and sampling from February 2008 onwards. During the latter half of 2007, a total of 4500 m of resource evaluation drilling was completed on the Iron Chieftain MLs 2662, 2706, 4745, 4746 and 4747. Elsewhere, OneSteel concentrated much effort on starting Project Magnet, the complementary mining development of the subcropping magnetite orebody at the Iron Duke and Duchess open pits. The mining engineering consultancy work involved included scheduling, design and prediction of geotechnical issues. The Life of Mine project material stream was scheduled until 2030. The magnetite extraction pit development was to be staged in two phases, with material movement peaking in 2010, 2015 and 2030. The schedule included a haematite ore component for supply to OneSteel’s Australian customers, which would build up to approx 2 Mt p.a. in 2016.