New Millennium Iron Corp. Announces Tata Steel Minerals Canada's Execution of Definitive Agreements for a Joint Venture on the
New Millennium Iron Corp. Announces Tata Steel Minerals Canada's Execution of Definitive Agreements for a Joint Venture on the Howse Deposit and Rail Access for Its Direct Shipping Ore Project
CALGARY, ALBERTA -- (Marketwired) -- 09/18/13 -- New Millennium Iron Corp. ("NML" or the "Corporation") (TSX:NML) (OTCQX:NWLNF) announced today that Tata Steel Minerals Canada Limited ("TSMC"), in which NML has a 20% interest, has signed a number of inter-related definitive agreements with certain parties, including Labrador Iron Mines Holdings Limited ("LIM"), that favourably impacts the Direct Shipping Ore ("DSO") Project owned and operated by TSMC.
These agreements formalize the earlier framework agreement in principle between TSMC and LIM signed on March 12, 2013 (see news release NR 13-07). These agreements provide for the acquisition by TSMC of up to 70% of the Howse deposit, the formation of a joint venture to develop the Howse deposit, as well as access by rail of iron ore products from TSMC's DSO operation to LIM's Silver Yard facility, for further transport to the port in Sept-Iles. TSMC expects to enjoy the benefit of cost synergies from the rationalization of various aspects of the respective iron ore operations of TSMC and LIM.
Dean Journeaux, President and CEO of NML, said, "We are pleased that the earlier framework agreement is now formalized so that TSMC can now proceed with the related activities that were proposed. These activities would lead to improvements in operating efficiencies for the DSO Project. TSMC now stands to achieve substantial savings by taking advantage of synergies made possible through co-operation with LIM. The acquisition of up to 70% of the Howse deposit will result in a net addition of resources located only about four kilometers from the year-round TSMC processing plant site in the Timmins area."
Summary of Project Development Activities:
Based on the agreement, TSMC is proceeding with the necessary work in order to benefit from the joint venture and rail agreements summarized below:
-- Under the terms of the joint venture agreement (the "Agreement"), TSMC and LIM have agreed to form an unincorporated joint venture (the "Joint Venture") pursuant to which Howse Minerals Limited, a wholly owned subsidiary of TSMC ("HML"), has acquired an initial 51% participating interest in the 39 staked mineral claims identified as License Numbers 021314M and 021315M that together comprise the Howse Deposit (the "Property") for a total cash consideration of $30 million. NML is required to make its' pro rata contribution of C$6 million for this payment, of which $4.7 million has been contributed to date. TSMC shall be the initial operator of the Joint Venture (the "Operator"). -- LIM will conduct a C$5 million exploration program over the course of the 2013 calendar year. The exploration program will comprise drilling a targeted 70 holes of reverse circulation and diamond drilling with up to 10,000 meters of drilling. The objective of the drill program is to convert the historical resources to National Instrument 43-101 (NI 43- 101) compliant mineral resources by spring 2014 and to collect metallurgical, geotechnical, hydrogeological, and hydrology information to advance Howse towards production. The feasibility study is expected to be completed by July 2014 with a target for commencement of mine development in 2015 and commercial production in 2016. -- In order to increase its interest in the Howse joint venture to 70%, TSMC is required to invest an additional C$23.5 million in expenditures to the joint venture. Once TSMC has contributed this amount, TSMC and LIM will be required to contribute their respective pro-rata share of additional required contributions. Considerable savings are expected to be achieved in the TSMC mining plan due to the accessibility of the Howse deposit to the TSMC processing plant. -- After TSMC has earned its 70% participating interest in the Property, each Party shall be obligated to contribute funds in response to any cash call by the Operator that is approved by the management committee established pursuant to the Agreement to oversee the activities of the Joint Venture and the Operator (the "Management Committee") in proportion to their respective participating interests in the Property. To the extent that a Party does not fund as required by a cash call, its participating interest will be reduced accordingly. If a Party's interest becomes less than 10%, such Party shall be deemed to have withdrawn from the Joint Venture and shall be deemed to have transferred its entire participating interest to the other Party. -- The Management Committee established pursuant to the Agreement will consist of between two and four members, with one to two members appointed by each of LIM and TSMC. The chairman of the Management Committee shall be appointed by the Party having the greater participating interest. Certain decisions shall require the approval of 85% or more of the participating interests. -- If the Property is not in commercial production by June 1, 2017, LIM shall have the right, subject to certain stated conditions, to require TSMC to sell to LIM such portion of TSMC's participating interest such that each of the Parties would own a 50% participating interest, and LIM shall replace TSMC as the Operator. -- The Operator shall commence a feasibility study as directed by the Management Committee, which will set forth a plan for the optimization by the Operator of the costs and logistics in connection with the mining, processing and transportation of iron ore product from the Property. -- The Parties will negotiate in good faith an agreement for the beneficiation of the iron ore produced by the Joint Venture at TSMC's plant located at the Timmins Area and such agreement would be on mutually agreed terms on an arm's length basis. -- The construction of a rail link between TSMC's Timmins Area processing plant to LIM's Silver Yard is well underway to establish access to the TSH main line. Considerable savings are expected to be realized due to utilization of certain existing rail infrastructure and more direct access to Silver Yard that the agreements permit. The final surface rights and construction permits required by the parties from the Government of Newfoundland and Labrador were recently received to permit construction of the last portion of the rail link to Silver Yard.
About New Millennium
The Corporation controls the emerging Millennium Iron Range, located in the Province of Newfoundland and Labrador and in the Province of Quebec, which holds one of the world's largest undeveloped magnetic iron ore deposits. In the same area, the Corporation and Tata Steel Limited ("Tata Steel"), one of the largest steel producers in the world, have advanced a DSO Project to the production stage, from which commercial sales will soon begin. Tata Steel Limited owns approximately 26.3% of New Millennium and is the Corporation's largest shareholder and strategic partner.
Tata Steel exercised its exclusive option to participate in the DSO Project and has a commitment to take the resulting production (see news release 10-16 dated September 14, 2010). The DSO Project is owned and operated by TSMC, which in turn is 80% owned by Tata Steel and 20% owned by NML. The DSO Project contains 64.1 million tonnes of Proven and Probable Mineral Reserves at an average grade of 58.8% Fe, 21.0 million tonnes of Measured and Indicated Mineral Resources at an average grade of 59.2% Fe, 10.3 million tonnes of Inferred Resources at an average grade of 58.3% Fe and about 25.0 - 30.0 million tonnes of historical resources that are not currently in compliance with NI 43-101 (see news release 09-03 dated February 11, 2009, news release 09-05 dated March 4, 2009, news release 09-16 dated December 9, 2009, news release 10-12 dated July 8, 2010 and news release 12-14, dated May 31, 2012). A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves, the Corporation is not treating the historical estimate as current mineral resources or mineral reserves and the historical estimate should not be relied upon.
The Millennium Iron Range currently hosts two advanced projects: LabMag contains 3.5 billion tonnes of Proven and Probable reserves at a grade of 29.6% Fe plus 1.0 billion tonnes of Measured and Indicated resources at an average grade of 29.5% Fe and 1.2 billion tonnes of Inferred resources at an average grade of 29.3% Fe (see news release 06-13 dated July 5, 2006 and news release 07-11 dated July 17, 2007); KeMag contains 2.1 billion tonnes of Proven and Probable reserves at an average grade of 31.3% Fe, 0.3 billion tonnes of Measured and Indicated resources at an average grade of 31.3 % Fe and 1.0 billion tonnes of Inferred resources at an average grade of 31.2% Fe (see news release 09-01 dated January 16, 2009). Tata Steel also exercised its exclusive right to negotiate and settle a proposed transaction in respect of the LabMag Project and the KeMag Project (see news release 11-09 dated March 6, 2011).
The Millennium Iron Range now hosts other taconite deposits. The first is the Lac Ritchie property located at the north end of the Range. The initial 2011 drilling of 40 holes in this property revealed Indicated Resources of 3.330 billion tonnes at an average grade of 30.3% Fe, and Inferred Resources of 1.437 billion tonnes at an average grade of 30.9% Fe (see news release NR 12-11, dated April 02, 2012).
Two other taconite deposits are located south of the LabMag deposit in the Millennium Iron Range. The initial 2012 drilling of 23 holes in the Sheps Lake property and of 50 holes in the Perault Lake property revealed Indicated Resources of 3.580 billion tonnes at an average grade of 31.22%, and Inferred Resources of 795 million tonnes at an average grade of 30.56% (see news release NR 13-04, dated February 11, 2013).
The Howells Lake - Howells River North deposit is located between the LabMag and KeMag deposits, and evidences mineral continuity in the Range. The 2011 and 2012 drilling of 11 holes in the Howells River North property and of 45 holes in the Howells Lake property, revealed Indicated Resources of 7.631 billion tonnes at an average grade of 30.39% Fe, and Inferred Resources of 3.310 billion tonnes at an average grade of 29.83% Fe (see news release NR 13-15, dated May 23, 2013).
The Corporation's mission is to add shareholder value through the responsible and expeditious development of the Millennium Iron Range and other mineral projects to create a new large source of raw materials for the world's iron and steel industries.
For further information, please visit www.NMLiron.com, www.tatasteel.com, www.tatasteelcanada.com, and www.tatasteeleurope.com.
Dean Journeaux, Eng., and Thiagarajan Balakrishnan, P. Geo., are the Qualified Persons as defined in National Instrument 43-101 who have reviewed and verified the scientific and technical mining disclosure contained in this news release.
About Labrador Iron Mines Holdings Limited (LIM)
Labrador Iron Mines (LIM) is Canada's newest iron ore producer with a portfolio of DSO iron ore operations and projects located in the prolific Labrador Trough. Initial production commenced at the James Mine in June 2011, and through 2012, iron ore sales have totalled 2.0 million dry tonnes in 13 shipments into the Chinese spot market.
Now in its third year of operations, LIM is targeting the sale of 1.7 million tonnes of iron ore products in 10 shipments in 2013.
The James Mine is connected by a direct rail link to the Port of Sept-Iles, Quebec. The operation also benefits from established infrastructure including the town, airport, hydro power and railway service. Starting with the James Mine and leading to the development of the expanding Houston flagship project, LIM's objective is to provide shareholders with long-term value with a plan to increase production towards five million tonnes per year from its iron ore deposits in Labrador and Quebec, all within 50 kilometres of the town of Schefferville.
LIM is currently the only independently-owned Canadian iron ore producer listed on the Toronto Stock Exchange and trades under the symbol LIM.
This news release contains certain forward looking statements and forward looking information (collectively referred to herein as "forward looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward looking statements. Forward looking information is often, but not always, identified by the use of words such as "could", "should", "can", "anticipate", "expect", "believe", "will", "may", "projected", "sustain", "continues", "strategy", "potential", "projects", "grow", "take advantage", "estimate", "well positioned" or similar words suggesting future outcomes. In particular, this news release may contains forward looking statements relating to future opportunities, business strategies, mineral exploration, development and production plans and competitive advantages.
The forward looking statements regarding the Corporation are based on certain key expectations and assumptions of the Corporation concerning anticipated financial performance, business prospects, strategies, regulatory developments, exchange rates, tax laws, the sufficiency of budgeted capital expenditures in carrying out planned activities, the availability and cost of labour and services and the ability to obtain financing on acceptable terms, the actual results of exploration and development projects being equivalent to or better than estimated results in technical reports or prior activities, and future costs and expenses being based on historical costs and expenses, adjusted for inflation, all of which are subject to change based on market conditions and potential timing delays. Although management of the Corporation consider these assumptions to be reasonable based on information currently available to them, they may prove to be incorrect.
By their very nature, forward looking statements involve inherent risks and uncertainties (both general and specific) and risks that forward looking statements will not be achieved. Undue reliance should not be placed on forward looking statements, as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in the forward looking statements, including among other things: inability of the Corporation to continue meet the listing requirements of stock exchanges and other regulatory requirements, general economic and market factors, including business competition, changes in government regulations or in tax laws; general political and social uncertainties; commodity prices; the actual results of exploration, development or operational activities; changes in project parameters as plans continue to be refined; accidents and other risks inherent in the mining industry; lack of insurance; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental legislation, affecting the Corporation; timing and availability of external financing on acceptable terms; conclusions of, or estimates contained in, feasibility studies, pre-feasibility studies or other economic evaluations; and lack of qualified, skilled labour or loss of key individuals. Readers are cautioned that the foregoing list is not exhaustive.
The forward looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward looking statements included in this news release are made as of the date of this news release and the Corporation does not undertake and is not obligated to publicly update such forward looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.
With respect to the disclosure of historical resources in this news release that are not currently in compliance with National Instrument 43-101, a qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves, the Corporation is not treating the historical estimate as current mineral resources or mineral reserves and the historical estimate should not be relied upon. Contacts: New Millennium Iron Corp. Dean Journeaux President & CEO (514) 935-3204
New Millennium Iron Corp. Andreas Curkovic Investor Relations (416) 577-9927 www.NMLiron.com