Century Iron Mines (TSE:FER) is "well financed" to move ahead with its iron ore properties, investment and capital markets firm Pope & Co. said in a recent research note.
Pope & Co. said that the mineral explorer, with projects in Quebec and Labrador, was looking at shipping iron ore concentrate from its advanced Duncan Lake Deposit via pipeline through to James Bay.
In early December, Century and WISCO International Resources - a unit of Wuhan Iron & Steel, China's third-largest steel producer - definitively agreed to form a joint venture to explore and develop three of Century's iron ore projects: Duncan Lake, Attikamagen and Sunny Lake.
Initial details of the deal were announced in August.
WISCO Resources will invest an aggregate of $120 million in exchange for a 40 percent stake in the Duncan Lake, Attikamagen and Sunny Lake projects. WISCO will also assist in procuring debt financing for up to 70 percent of capital expenditures required to achieve production.
On concluding the agreement, Century Iron Mines' president and CEO, Sandy Chim, said: "Our successful conclusion of the negotiations with WISCO Resources enables us to expand and expedite the exploration of our Duncan Lake, Attikamagen and Sunny Lake projects with WISCO as our key strategic partner."
In recent media appearances, Chim said that strategic partners WISCO and Minmetals were taking "an active role" in investing in the company.
The latest deal gives "access to capital and access to [China's] market", as China is a very significant market, buying 65 percent of seaborn iron ore. In order to secure long-term supply, major players (such as Wisco and Minmetals) have to "get in early on the game".
Chim also highlighted the growing "urbanization and industrialization" of China. Over 20 years, income per capita has risen significantly and will match the level of South Korea in 20 years' time. As China industrializes, it will drive demand for iron ore.
Focusing on his company's Quebec projects, Chim said that infrastructure was in place and that the company was working together with Quebec's government to implement "Plan Nord" - an investment plan that will see around $80 billion invested in the north of the province.
In terms of the outlook for iron ore prices, Chim said that since August, the price had come down from $180 a tonne to $110 a tonne, "but it went back up very quickly" to $140.
Chim's long-term forecast for at least the next five years is that the price will fluctuate between $140 to $160/$170; over the long-term, the price may be around the $140 mark.
The interviews with Century Iron Mines's president and CEO Chim can be found at:
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