Labrador Iron Mines - Schefferville Project
- - Direct shipping (DSO) lump and sinter fines high-grade hematite iron ore in Labrador
- - Mining and shipping from the James Deposit commenced in 2011
- - Commissioning of the Silver Yards processing plant is complete
- - Low capital expenditure requirements - fully funded
- - Existing rail transportation, deep water ports, shipping facilities and hydro power
- - Potential mine life of more than 20 years
- - Former operations of the Iron Ore Company of Canada
The Schefferville Projects – further detail
The group has a 33% interest in Toronto-listed Labrador Iron Mines Holdings Limited (LIM) which began mining and shipping iron ore in 2011.
The Schefferville Projects are located in the west-central part of the Labrador Trough iron range, one of the major iron ore producing regions in the world, and are divided into two separate portions, one within the Province of Newfoundland and Labrador, and the other within the Province of Quebec, both located near the town of Schefferville, Quebec.
The iron ore deposits forming the Schefferville Projects are predominantly hematite ore and were part of the original Iron Ore Company of Canada direct-shipping Schefferville operations conducted from 1954 to 1982.
A compliant resource of 37 million tonnes has now been estimated in the James, Redmond and Houston deposits. The remaining seventeen deposits, excluding James, Redmond and Houston, have a historical resource estimated at approximately 125 million tons of direct shipping iron ore, based on work carried out by IOC prior to the closure of its Schefferville operations in 1984. The historical estimate was prepared according to the standards used by IOC and, while still considered relevant, is not compliant with NI 43-101.
The plans for the Schefferville Projects envision the mining of the deposits in four stages. Stage 1 comprises the deposits closest to existing infrastructure, the mining of which will be undertaken in two phases. The first phase will involve mining of the James and Redmond deposits and the second phase the Houston, Knob, Gill and Ruth deposits, all in Labrador, together with the Denault, Star Creek and Malcolm deposits in Quebec.
The James deposit is accessible by existing gravel roads and is located approximately 5 km southwest of the town of Schefferville. The Redmond deposit is located approximately 12 km south of the James deposit and can be reached by existing gravel roads. The Knob Lake deposit, located approximately 3 km southwest of the town of Schefferville, and the Houston deposit, located approximately 20 km southeast of Schefferville, can also be reached by existing gravel roads.
During the mining of the stage 1 deposits, planning will be undertaken for the future operation of the more distant deposits in stages 2, 3 and 4. As currently envisioned stage 2 will comprise the Howse, Barney and other adjacent deposits which are relatively close to existing infrastructure. The deposits of stages 3 and 4 are more than 60 km from Schefferville and will require substantial infrastructure investment.
The in-situ ore is estimated to contain around 56% to 58% iron and it is expected that the beneficiation process will eenhance the product grade to approximately 65% iron and remove unwanted material; production will be coarse lump ore (about 25%) and a finer sinter feed. These products will be transported by the existing railroad systems to the port of Sept-Îles on the St. Lawrence River for onward shipping, most likely to steel mills in Europe or Asia. The whole operation will utilize well proven, relatively basic technology and will closely reflect that previously carried out by IOC in the same general location for almost thirty years from 1954 to 1982.
Mining operations
Mining and processing operations will be conducted for eight months per year from April to November using conventional open pit mining methods employing drilling and blasting operations at an anticipated initial rate of 6,000 tonnes per day. The processing schedule is anticipated to be over a period of approximately 212 days per year.
Stockpiled ore will be fed to the plant where both lump ore and sinter fines will be produced. These will be loaded into leased rail cars that will be transported to a port facility in Sept-Îles.
Transportation infrastructure
The 355 mile rail line between Schefferville and Sept-Iles has been in continuous operation for over fifty years. Tshiuetin Rail Transportation Inc (“TSH”), a consortium of three local Aboriginal First Nations, owns and operates the approximately 130 mile main line track between Schefferville and Ross Bay Junction where it connects to IOC’s railway which runs the remaining 225 miles to Sept-Iles. Some refurbishment of the rails, ties and culverts of the TSH main line track will need to be carried out to enable it to continuously carry large volumes of iron ore traffic. LIM is leasing rail cars and engines to transport its ore to Schefferville. The operation of the line is subject to common carrier arrangements.
Ore is being shipped from the port of Sept-Îles on the North Shore of the Gulf of St. Lawrence on the Atlantic Ocean. Sept-Îles is a large natural harbour, more than 80 metres in depth, which is open to navigation year round, and is the most important port for the shipment of iron ore in North America, serving the Quebec and Labrador mining industry. Each year approximately 23 million tonnes of merchandise is handled, comprised mainly of iron ore. It is an international marine hub for major maritime routes between North America, Europe and Asia, and nearly 80% of its merchandise traffic, mostly iron ore, is destined for international markets.
Marketing
Marketing discussions with potential end users are continuing and samples have been dispatched to a number of steel mills and independent laboratories. These discussions have indicated an encouraging level of interest in the LIM products based on the metallurgical test results and analysis of the samples supplied. The indicated high iron grades and the low level of impurities are important and should ensure that both lump ore and sinter fines will be readily accepted by a wide range of customers.
Chinese and other Far Eastern consumers are showing a growing interest in seeking iron ore from Eastern Canada. The rapid development in Chinese demand for iron ore, coupled with a desire by China to diversify from its traditional sources of supply, has begun to make Eastern Canada a viable source for this market. Discussions continue with a number of Chinese customers and importers as well as a number of European producers.
Quebec iron ore properties
LIM has established Schefferville Mines Inc (“SMI”) to acquire interests in mining rights in Quebec covering approximately 9,014 hectares together with an exclusive operating interest in a mining lease covering about 2,816 hectares. These rights and interests are held subject to a royalty of $2 per tonne of iron ore produced from the properties.
A preliminary review of these properties was completed in 2010 and an initial development plan generated and incorporated into the exploration plan. It is expected that this will permit at least one deposit to be brought into production in 2012, subject to receipt of satisfactory engineering, environmental and other permits.
The introduction of these Quebec properties, particularly those close to the town of Schefferville, will have a positive effect on the overall project development plan as it will extend the life of stage 1 and will as a result defer the time at which capital expenditure to reach the more distant phases 3 and 4 deposits needs to be made.
Manganese properties
The manganese properties in both Quebec and Labrador that were acquired in 2009 will be the subject of exploration during 2010. It may be possible to develop compliant resource estimates for one or two of these deposits in 2010 and dependent upon engineering, environmental approvals and permit releases some manganese concentrate may be able to be produced by 2012.
Also see the Labrador Iron Mines website