Century Iron Mines (TSE:FER) on Friday released the maiden NI 43-101 mineral resource estimate on its jointly owned Joyce Lake direct-shipping ore (DSO) project, part of the Attikamagen project located in Newfoundland and Labrador.
The Joyce project is part of the Attikamagen project in which Century has joint ventures with Wuhan Iron & Steel Company (WISCO), the fourth-largest steel producer in China, andChampion Iron Mines (TSE:CHM).
The results of the estimate, prepared by SGS Canada Inc., show 10 million tonnes of measured and indicated mineral resources at an average grade of 59.45 per cent total Iron (TFe) plus an additional 5.6 million tonnes of inferred mineral resources, at a cutoff grade of 50 per cent TFe.
"We are very pleased having completed the first mineral resource estimate on the Joyce Lake DSO project,” said president and CEO Sandy Chim.
“Reaching this milestone marks the beginning of the development of a significant DSO operation by Century in the Labrador Trough iron ore mining camp.”
Chim added that the current mineral resource estimate is only on the northern part of the Joyce Lake property. The mineralization remains open to the south. In addition, two other DSO targets, about three kilometres south and south-west of Joyce Lake, with similar geophysical signatures, will be drill tested this winter.
“This resource estimate adds solid fundamentals that underline the potential and value of the Joyce Lake DSO project and the whole Schefferville area in which Century has extensive property holdings with a number of promising DSO targets that we are currently working on.”
The company has said in the past that Joyce Lake is a high-grade DSO deposit capable of producing at one million tonnes a year. It is expected to be up and running in 2015, and the capex should come in at a relatively modest $100mln, based on similar projects in the region.
Direct shipping ore refers to iron ore that can be shipped directly to a steel furnace. DSO mines are typically rarer than the magnetite-bearing banded iron formations, but are considerably cheaper to mine and process as they require less beneficiation due to the higher iron content.
The DSO deposit was confirmed through a ground gravity survey, surface geological mapping and sampling. A drill program was also conducted in 2011-2012, which included 118 drill holes totaling 13,328 metres and covering an area of 1,100 metres along strike and 600 metres in width.
The company, which is aiming to become a major iron ore producer, is one of the largest iron ore companies in Canada, in terms of number of claims by area. It has 6,493 claims and titles, covering some 198,779 hectares in the provinces of Québec and Newfoundland & Labrador.
It has interests in four iron ore projects, none of which yet generate revenue. The Duncan Lake project is located in western Québec, while three others, Sunny Lake, Attikamagen, and the Altius properties, are located in the Labrador Trough region of Québec and Newfoundland & Labrador.
At its Duncan Lake property last year, the company completed phase II drilling and released an updated NI 43-101 technical report. A preliminary economic assessment (PEA) is planned for this year.
The project, using a 16-per-cent iron cutoff, has a resource of 1.05 million tonnes, grading about 24 per cent iron, for 256,349 tonnes of contained ore in the measured and indicated category; and 563,000 tonnes, grading 24.7 per cent iron, for 139,061 tonnes of contained iron in the inferred category.
It also last year announced NI 43-101 compliant initial mineral resource estimates on its Hayot Lake and Rainy Lake properties.
The Hayot Lake iron deposit in Quebec, which also forms part of the Attikamagen project, has a resource of over 1.7 million tonnes, grading 31.25 per cent iron, for 538,438 tonnes of contained iron in the inferred category – using a 20-per-cent iron cutoff.
Using the same cutoff, Rainy Lake, part of its Sunny Lake project, has a resource of over 7.2 million tonnes of ore, grading 30.18 per cent iron, for 2.19 million tonnes of contained iron in the indicated category; and over 8 million tonnes, grading 29.86 per cent iron for 2.59 million tonnes of contained iron in the inferred category.
Last month, Century announced its third fiscal quarter results, ending last year with cash and equivalents of around $44 million.
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