Murchison Metals Ltd. (MMX.AU) said Thursday early drilling results indicate its 50%-owned Jack Hills project in Western Australia state could have an iron ore resource up to double its current certified size.

Murchison said in a statement that if realized, new exploration target volumes at the project would increase the resource to 1.5 billion-2.1 billion metric tons of iron ore from an upgraded resource in February of 991 million metric tons.

To put that in some perspective, in the year to June 30 BHP Billiton Ltd. produced 114.4 million metric tons of iron ore, although the quality of its ore could differ from Murchison's.

"We look forward to the resource upgrade later in the year as the drilling program and studies progress," Murchison Executive Chairman Paul Kopejtka said in a statement.

A $23 million exploration program involving 12 drilling rigs commenced at Jack Hills in April.

Any resource upgrade will add to Murchison's attractiveness as a potential takeover target, with the company having already received approaches from possible Chinese investors.

By 0435 GMT, Murchison shares were up 8.1% at A$1.935 compared to a 0.2% rise in the broader market.

Murchison said in July it had "positive discussions" with Chinese groups interested in assisting in the development of the Oakajee port and rail venture in WA, of which it also owns 50%.

The development prompted speculation Sinosteel, which bought rival WA miner Midwest Corp. last year, could consider a fresh move on Murchison.

The Australian government, however, last September limited any Sinosteel investment in Murchison to 49.9%. Japan's Mitsubishi Corp. owns the other half of Jack Hills and the Oakajee port and rail venture.

In the company's statement, Kopejtka said the focus in recent months has been on the Oakajee project, given its "pivotal role in unlocking value for midwest miners and shareholders, such as Chinese groups, that have invested more than A$2.5 billion in midwest mining companies and mining projects."

"However, these latest results from Jack Hills underline the enduring importance and value of this major project, which is developing into potentially the largest iron ore project in the midwest region."

Kopejtka and Murchison Managing Director Trevor Matthews are currently traveling and couldn't be reached for immediate comment.

-By Ross Kelly, Dow Jones Newswires; 61-2-8235-2957; ross.kelly@dowjones.com