In my limited experience this isn't true. So far the only iron deposit I've found is of quite modest size, just slightly larger than the surface copper deposits I've been mining. At about a dozen ingots worth it definitely didn't set me up for long at all.
It wasn't very deep. I found it while caving, not far beneath the surface. After going well down into the granite layer and mining a visible cassiterite vein, (~50 bronze ingots worth) on the way out I used the propick in Node Search Mode to make a number of tests. One of them reported the Hematite. When mining it out I saw that it was right at the granite-shale boundary.
For new players
Note that when using the propick in Node Search Mode, any amount reported is important information while looking for new deposits because it's reporting real blocks it found and not theoretical probabilites. If the propick finds just a single block that's part of an enormous deposit it will still report "trace". You need to locate an ore ore block and either do further tests or start mining the deposit to know its true extent.
After mining a deposit, reports of trace amounts can help you extract the remaining small bits of ore disconnected from the main ore body.
Vintage Story isn't Minecraft
New players, ignore most of what you learned from Minecraft about locating ore. As DrEngine just said, "Horizontal strip mine like in Minecraft doesn't work at all."
This is because ore distribution in Minecraft is very, very simple. With the exception of emerald, every ore in Minecraft's overworld spawns in all biomes. Everything is everywhere—you have to be unlucky not to find it!
Vintage Story is quite different. The ore generation rules mean that each mineral has regions where there's none at all! The most important feature of the prospecting pick is to tell you where not to look! (Note that the propick can be wrong about this, and that you can get lucky and hit a deposit the propick doesn't report, but this is too rare to rely on. There are also minerals that the propick never reports. Read about this in the Prospecting for Ore Fields section of the wiki.)
The only mining method in Minecraft that carries over to VS is exploring caves to spot visible deposits. Other VS methods, locating surface stones and using both propick modes, are completely different and very important.
VSProspectorInfo mod
This new mod is a tremendous help in using the propick in Density Search Mode. It's available here: VSProspectorInfo - conveniently store prospecting pick results directly in your map data. Instead of you writing the results from the propick on scraps of paper or entering them into a spreadsheet, this mod stores them in game and marks the tested chunks on the map. You can see on the map which chunks you've already tested so you never needlessly repeat a test, and the stored results show as a tooltip when you mouse over a tested chunk. Brilliant and highly recommended.
Trivial note: What Minecraft players call "strip mining" is completely unrelated to the real-world term
Minecraft players have taken to calling straight tunnels dug 2 or 3 blocks apart in the diamond layer "strip mining" because they don't care about the meaning of the term in the real world. There it's the very destructive method of excavating all the vegetation, dirt, and unwanted rock above to expose a shallow horizontal ore deposit to daylight. Doing real-world strip mining in Minecraft would be pointless since all you'd get would be a little iron because ore deposits in Minecraft are tiny, not flat layers that can extend for miles like coal in the real world.
While formerly used only for surface mining, today an extreme type known as "mountaintop removal" is practiced in the Appalachian mountains of the eastern US where it hideously disfigures the landscape.