Australian mining firm Cape Alumina (ASX: CBX) has announced the good results and drilling potential in its Bauxite Hills mines.

In a disclosure to the stock exchange, Cape Alumina's Chairman, Mr George Lloyd, said the concept study provided the Company with the confidence to continue with the next stages of the project's development.

"The proposed Bauxite Hills mine and port project has potential to deliver great value for shareholders, the local aboriginal communities of western Cape York and the people of Queensland," he said.

Bauxite, which is a key ingredient in the manufacture of aluminium products, is still quite in demand world-wide. The listed firm in the ASX, also cited the high‐grade results from the reconnaissance samples and the close proximity of the Bauxite Hills project to the existing port at Skardon River make the project appear to be very attractive - especially given the strong outlook for the growing Asia‐Pacific bauxite market.

"Over the past few months Cape Alumina has completed the Bauxite Hills concept study, lodged the first of several Mining Lease Applications (MLAs) over the area and commenced preparations for an Environmental Impact Statement (EIS)," he said.

Mr Lloyd said that, while the concept study focused on four plateaux (BH1, BH3, BH4 and BH5) within Cape Alumina's tenements, testing at a further two plateaux within the tenements (BH2 and BH6) had also returned high‐grade samples.

He said that results have confirmed the Company's assessment that the Bauxite Hills area represents a new, high grade bauxite discovery which has the potential to support a major new export bauxite operation in western Cape York.

Over the coming months Cape Alumina will undertake an advanced exploration and drilling program to establish a JORC code‐compliant resource before moving to the feasibility stage of the project.

"We will also commence environmental studies of the area and engage with the Traditional Land Owners with a view to negotiating an agreement to establish the relationship between them, the Company and the project."

Mr Lloyd said that the conduct of environmental and technical studies of the Bauxite Hills project will benefit greatly from the experience and resources that Cape Alumina has already invested in similar studies on western Cape York.

"It will also boost economic development in regional centres such as Cairns, which will be an important base for the fly‐in fly‐out component of the workforce," Mr Lloyd said.

Bauxite Hills project details:

The Bauxite Hills project area is located approximately 95 kilometres north of Weipa on western Cape York,

Queensland, within the dissected lateritic bauxite plateau between the Ducie and Skardon Rivers.

At Bauxite Hills Cape Alumina has identified seven prospective zones, BH1‐BH7, within EPM15376, 15374 and 16899. These tenements are 100 per cent held by Cape Alumina Limited.

As announced to the Australian Securities Exchange (ASX) in October 2010, reconnaissance exploration undertaken across Cape Alumina's Bauxite Hills tenements has returned encouraging results which indicate that the area has the potential to host a new, high‐grade bauxite discovery.