The Balla Balla iron ore deposit owned by Perth-based Aurox Resources Ltd (ASX: AXO) has had a major resource upgrade from detailed drilling for a planned open cut and projected depth and strike extensions of the deposit just west of Port Hedland near the Pilbara coast.

Aurox announced a 49% increase in ore reserves today to a proved 102 million tonnes grading 45.1% iron and 0.64% vanadium oxide (V205), and a probable 33 Mt @ 45.4% Fe and 0.65% V205.

Managing director Charles Schaus said updated resource models were delivered to Oreology Pty Ltd for economic optimisation, and calculation of new JORC compliant ore reserve estimates.

The new Central Pit and Eastern Block areas are now contained within a single pit design and their reserve numbers were now reported together.

Schaus said consultants were now remodelling the Western Pit to include infill and extension drilling completed between January and May this year.

The work will include the results from six deep diamond holes received last month, which demonstrate the strong geological continuity of the deposit, Schaus said.

He was confident the ore reserves at Balla Balla will continue to grow this year, with the latest results representing only about one-third of the deposit's full potential.

The company has begun engineering studies and is now securing orders for all long lead time items such as crushers and a mill.

Schaus said Balla Balla also has significant titanium and phosphate potential and is near major ports, gas and grid power with main highway access.

Magnetite ore shipments are now scheduled to commence to China in the second half of 2010 which, the company claims, will make Balla Balla Western Australia's first magnetite producer.