Century Iron Mines (TSE:FER) says that WISCO International has completed its second $20 million equity investment in the Attikamagen iron property, bringing its stake in the joint venture to 40 per cent.
The Attikamagen property near Schefferville, Quebec is majority held by the joint venture company called Labec Century, which is now owned 40 per cent by WISCO, One of China’s leading steelmakers, and 60 per cent by Century Iron. WISCO has now invested a total of $40 million into the project, which features the Joyce Lake direct shipping ore (DSO) deposit.
The first $20 million investment by WISCO in Labec Century, which holds a 56 per cent stake in the Attikamagen property, was made in September of last year.
The remaining interest in the project is held by Champion Iron Mines (TSE:CHM), with a further 4 per cent to be transferred to Labec once Champion completes due diligence.
"The completion of the earn-in of the full 40% interest by WISCO represents an achievement of a key milestone in the development of the Attikamagen Project and completes the structure designed to advance the project in a way that will enhance the chance of its success in terms of capital funding and product sale," said president and CEO of Century Iron, Sandy Chim.
The company in May revealed preliminary economics on the most advanced Joyce Lake deposit at Attikamagen, showing a pre-tax net present value of $94.5 million at an 8 percent discount rate. The internal rate of return was pegged at 35 percent pre-tax, with initial project capex estimated at $96.6 million including contingency, and a projected payback period of just less than three years from production start-up.
"This closing further confirms our partner's confidence and commitment to the joint venture," added Chim.
Indeed, a feasibility study on the project is planned for the upcoming year, with an exploration program also anticipated to include infill and resource definition drilling. The aim is to expand the property beyond its current resource boundaries, with the goal of growing the operation.
The study is expected to be fully covered by the joint venture, the company said, as well as by the additional capital contribution from Wuhan.
Direct shipping ore refers to iron ore that can be shipped directly to a steel furnace, with these mines typically rarer than magnetite-bearing banded iron formations, but considerably cheaper to mine and process as they require less beneficiation due to the higher iron content.
Century Iron, 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.
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