Cyclone Metals has recently acquired a high-potential magnetite iron ore project in the Labrador Trough. The strategically located asset is in close proximity to other major iron ore producers and developers in a world-class mining province of Canada.
Recent increases in the iron ore price, combined with an attractive currency exchange rate for Canadian producers, have renewed interest in the Company’s wholly owned Block 103 Iron Ore Property. This has led to an update of the 2013 Preliminary Economic Assessment (PEA).
Cyclone Metals (ASX:CLE) has acquired a significant iron ore property in the world class Labrador Trough in Canada. It’s located 30km northwest of Schefferville, a mining town in Quebec and has the potential to become part of a burgeoning global magnetite concentrate industry.
The company says the Block 103 property has historical mineral resources and that it plans to spend up to $2 million on exploration. It’s also funding a share placement to its existing investors to fund initial work and general working capital costs.
The Block 103 Property is part of the world-class Labrador Trough, an iron belt that accounts for 99% of Canada’s iron ore production. There are several large iron ore operations in the area including Rio Tinto IOC’s Carol Lake and Cliffs Natural Resources’ Wabush mines. These projects produce pellets and concentrates for direct shipping to the iron steel industry. The area also hosts weakly metamorphosed magnetite iron formations called taconite which are still undeveloped but have large reserves.
A preliminary economic assessment (PEA) is one of the first technical studies that a mining company must produce before moving into the development phase. This study estimates the cost and time required to develop a mining project and includes a detailed breakdown of the deposit's economic potential.
The PEA contains a technical report prepared by a Qualified Person who has the relevant experience to produce this type of document. The resulting document can then be used to secure funding for the project.
Ultimately, a PEA can be the first step in the development process for a mineral resource, followed by pre-feasibility and feasibility studies. These technical documents provide more insight into the mining project's economic potential and include additional information on site-specific challenges such as surrounding communities, environmental concerns and regulatory or permit issues.
Recently, the Canadian Securities Administrators published a staff notice on issues relating to the use and disclosure of PEAs by reporting issuers in the mining sector. This notice is designed to clarify the CSA’s position on several issues relating to the use and disclosure of these documents.
Cyclone Metals Ltd (ASX:CLE) has acquired 100% ownership of the Block 103 Iron Ore Property in the heart of the world-class Labrador Trough iron belt, Quebec, Canada. Located 30 km northwest of Schefferville, the project covers 7,275 hectares and is one of the largest undeveloped magnetite iron ore projects in the world.
According to the Company, historical drilling at Block 103 totalled 115 holes for 28,021 metres that identified the Northwest and Greenbush zones of mineralisation. The Greenbush zone contains an inferred resource of 7.2 billion tonnes grading 29.2% total iron, classified as inferred using the Canadian NI 43-101 methodology.
Based on the historical data and current drilling results, M3 Metals believes that there is an opportunity to re-scope the block 103 iron ore deposit by focusing on a smaller higher grade part of the existing resource. This will result in optimized economics to carry the project forward to a pre-feasibility study.
Australian mineral development and investment company Cyclone Metals has acquired 100% ownership of the world's largest undeveloped magnetite iron ore project, located in Canada 30km northwest of Schefferville. The property is situated within the world-class Labrador Trough, which accounts for 99% of Canada's iron ore production.
The property contains several high-grade direct shipping ore (DSO) deposits which are amenable to low cost stripping, washing and screening. In addition, weakly metamorphosed magnetite iron formations (taconite), known as LabMag or KeMag, also occur in the area.
Management believes the project's potential to produce salesable iron ore can be significantly enhanced. This is due to its location in the Labrador Trough, close proximity to Tata Steel's iron ore operations and proximal to existing multi-user iron ore rail infrastructure.
In order to fund the initial work on the property, Cyclone has proposed a share placement to its existing shareholders for no less than $1 million and up to $2 million at an issue price of $0.0025 per share. This will be used to fund initial work on the project, costs of the acquisition and general working capital.
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