Century Iron shares rise 19% after updated resource estimate

Century Iron Mines Corp. (TSE:FER) saw its shares pop more than 19 per cent on Wednesday, just two days after releasing an updated resource estimate for its Duncan Lake iron project.

Shares rose 20 cents to $1.25 apiece as at about 1:25 p.m. ET.

The company on August 27 unveiled an updated NI 43-101 resource estimate for the Duncan Lake iron project in Quebec, noting an increase in total resources of 89 per cent.

Century also reported that the updated estimate increased the average grade for measured, indicated and inferred resources.

Century is a joint venture partner with Augyva Mining Resources Inc. (CVE:AUV) on the Duncan Lake project, and since the last resource estimate in 2010, the company has drilled an additional 44,007 metres of core in 125 drill holes. 

In the newest estimate, using a 16-per-cent iron cutoff, Century said Duncan Lake contains a defined 1.05 billion tonnes of measured and indicated at a grade of 24.4 per cent iron, compared to a previously reported 31.3 million tonnes at a grade of 23.7 per cent iron in 2010. 

Additionally, inferred resources are now estimated at 563 million tonnes grading 24.7 per cent iron, compared to a previously reported 821 million tonnes at a grade of 24.6 per cent iron.

On late Monday, Century president and CEO Sandy Chim said that there was also substantial resource tonnage of over half a billion in the inferred category. 

The company noted that the updated estimate adds “solid fundamentals” that underline the potential and value of the Duncan Lake project, and said the new mineral resources will form a “sound basis” for the preliminary economic assessment (PEA) being prepared by Met-Chem.

The PEA is targeting an annual production of 12 million pellet tonnes at better than 67 per cent iron grade and with all other elements within commercial specification, Chim stated, adding that the PEA is targeted for about year-end.

The company said that chemical analysis has established that, on average, the iron formation at Duncan Lake contains very low levels of deleterious elements, in particular 0.02m per cent phosphorus, 0.03 per cent manganese and 0.23 per cent magnesium.

The Duncan Lake property is located around 570 kilometres north of Matagami, Québec. Century said the property has recently been expanded to 534 exploration claims covering 25,605 hectares.

The company holds a 51-per-cent interest in the property, while Augyva holds a 49-per-cent interest. Century has the option to increase its interest in the property to 65 per cent, by spending $14 million by 2014.

Century Iron Mines is Canada's largest holder of iron ore land claims, with interests in Quebec and Newfoundland and Labrador. 

Along with the Duncan Lake project, the company currently has the option to acquire up to a 60-per-cent interest in the Attikamagen project under an option and joint venture agreement with Champion Minerals Inc. (TSE:CHM).

Century also wholly owns the Sunny Lake project and the Astray, Grenville, Menihek and Schefferville projects recently acquired fromAltius Minerals Corp. (TSE:ALS).