Iron ore project could face delay

A huge new iron ore find in Quebec, just outside the Labrador border, could affect New Millennium Capital Corp.’s plans to develop the large LabMag project in western Labrador, according to the company’s CEO.

The company has determined its KeMag property, located at Lac Harris, Quebec (18 kilometres north of the Labrador LabMag property), contains 1.349 billion tonnes of indicated iron ore and an additional 992 million tonnes of inferred resources.

While the 3.6-billion-tonne LabMag project is the larger of the two, New Millennium says that does not mean LabMag ”” and the 700 Labrador-based jobs that are expected to go with it ”” will be first in line for development.

CEO Robert Martin says the decision on how the company will proceed will likely be made later this year after a scoping study is conducted at the KeMag property.

”(That) process is expected to be completed by June 30, 2007, when a decision is expected to be made to advance one of the projects to the feasibility stage,” Martin said in a written statement.

”This will enable the company to pursue the two projects concurrently until economics determine which project should proceed first.”

In a telephone interview with The Telegram, Martin said he would personally rather develop the LabMag property, as it is the largest deposit of its kind in the world.

But he didn’t offer any guarantees.

”(LabMag) is the one I would like to develop, but we will have to wait and see until about June or July just how this other project compares,” Martin said.

”Either way, LabMag is a gigantic deposit, and sooner or later it has to be developed. When that happens, it will be great for Newfoundland and Labrador.”

Waiting period

If the Quebec project is first up, that means this province could be left to wait until the LabMag property gets developed.

Martin said the company’s vision for KeMag includes plans to ship the Quebec ore from a concentrator at the site via a lengthy slurry pipeline ”” which would also likely be located entirely in Quebec ”” to Sept.-Iles, where it would be pelletized and shipped.

Martin said the company would prefer to have that pipeline in Labrador, but doesn’t think it will be politically possible, especially if the KeMag project is tagged to proceed first.

”If we reach the stage where we have to make a decision between one deposit or the other, and if the decision was favourable for the Quebec deposit, I would anticipate difficulty in transporting Quebec concentrate through a pipeline over Labrador territory,” Martin said.

While the KeMag plan might affect the timeline for LabMag, Martin contends it would not affect how the company plans to develop the Labrador mine.

New Millennium would still seek to concentrate ore at the site in Labrador, then ship it through a pipeline to a newly constructed pellet plant at Emeril, just east of Labrador City. The pellets would then be carried to Sept.-Iles by train.

Construction costs for LabMag have been tabbed at approximately US$2.75 billion.

Work was expected to commence in 2008, with mining possibly beginning as early as 2011.

”We’re still moving ahead with the LabMag project and our plans to optimize the capital costs of that project ”” but at the same time, we will be working concurrently on the KeMag, doing a scoping study to see how it compares to the LabMag project,” Martin said, adding that the two finds make the overall project more attractive ”because it demonstrates we are not dealing with a single deposit but a series of deposits in an iron range, the size of which is yet to be determined.

”The addition of the KeMag resource to LabMag’s existing resources provides further options for developing the Millennium Iron Range.

”With the increased resource and complementary locations in two provinces, we have several opportunities to maximize operational efficiencies.”

Source: www.thetelegram.com