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Century Iron Mines takes significant next step in Joyce Lake development

Published: 23:52 22 Jul 2014 AEST

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Century Iron Mines (TSE:FER) has now started the bankable feasibility study on its Joyce Lake direct shipping ore (DSO) iron project, the company said Tuesday, which is expected to wrap up during the first quarter of next year.

The open pit DSO project, which benefits from low technical risk, capex and development time, is slated for production by 2016 and is expected to produce approximately 2 million tonnes of direct shipping ore per year. The deposit is the most advanced part of Century's Attikamagen Lake project, which lies east of Schefferville, Quebec.

The company has awarded BBA, an engineering firm based in Montreal, Quebec, with the contract to conduct the bankable feasibility study on the project.

The study follows Century more than doubling the measured and indicated resource at Joyce Lake in March. The total measured and indicated resources, at a cut off iron grade of 50%, increased 143% to 24.29 million tonnes at an average grade of 58.55% iron, from 10 million tonnes previously. 

"Commissioning of the BFS on the Joyce Lake project is a key development towards a production decision," said Century's CEO Sandy Chim.

"In parallel with the BFS, environmental work is underway and we plan to file the Environmental Impact Statement in advance of the BFS by the end of 2014." 

The chief executive said that the development of Joyce Lake is the company's primary focus before tackling several "much larger projects" in its extensive portfolio. 

Indeed, the company, which is developing iron ore projects in Canada's prolific Labrador Trough, is one of the largest iron ore companies in the country, in terms of number of claims by area. 

Century Iron in February completed the acquisition of the remaining interest to own, together with its JV partner, 100% of the Attikamagen Lake project. The project is now owned completely by Labec Century, which is held 60% by Century Iron, with the remainder held by Chinese steelmaker WISCO. 

Century's Attikamagen Lake project consists of 1,087 claims straddling the boundary between the provinces of Quebec and Newfoundland and Labrador. The Joyce Lake property is made up of 682 claims in Newfoundland and Labrador, with the whole project covering an area of 36,142 hectares.

The preliminary economics from the Joyce Lake deposit released in April 2013, based on the prior resource estimate, showed a pre-tax net present value of $94.5 million at an 8% discount rate. The internal rate of return was pegged at 35% 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. 

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. 

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on 9/7/21