New Millennium Capital Corporation

Clean sheet miningDean Journeaux of New Millennium Capital Corporation tells Ruari McCallion about the companyÔÇÖs ongoing iron ore mine developments in Labrador and eastern Quebec. It looks like a good time to get heavily into the mining business. Demand from China, India and other emerging economies is high, leading to high prices for all commodities, from aluminum to iron ore.  World Steel Dynamics projects that steel demand will continue to grow annually at 3.1 percent; at the same time, iron ore from China is rising in cost and the quality is in decline. Concentrates prices rose 200 percent from 2002ÔÇô07; oxide pellets followed to the tune of 158 percent. Demand for iron is likely to outstrip current supply by 2012, so itÔÇÖs just as well that the New Millennium Capital Corporation (NMCC) is developing claims in the Millennium Iron Range, in an area to the north of Emeril, Newfoundland, and east of Brisay, Quebec, in eastern Canada. While the company was established only in 2004, it is working on deposits that have been known since the 1960s.┬á ÔÇ£The original LabMag findings date back into history,ÔÇØ says Dean Journeaux, director of exploration for NMCC. ÔÇ£Our company president, Bob Martin, was working as a young geologist in the early 1960s when he recognized there was magnetiteÔÇönow commonly named taconiteÔÇöin the area. Taconite became a hot subject in the late 1960s, and his then-employer launched an intensive exploration operation. By the time that was wrapped up in 1979, it was estimated there were around 2.2 billion metric tons of reserves in the Labrador segment. When the claims came available, Bob Martin staked them and founded the LabMag Mining Corporation, which was established with the Naskapi tribe of the Kawawachikamach First Nation as partners.ÔÇØ Martin established NMCC in 2004 as a ÔÇ£pooled capital organizationÔÇØ under Toronto Stock Exchange rules, with the initial intention of pursuing gold-linked activities. Within a short time the companyÔÇÖs advisers and directors decided that the iron ore deposits held by LabMag were worth pursuing, and, having overcome any conflict-of-interest issues, LabMag was acquired.ÔÇ£WeÔÇÖre currently in the development stage,ÔÇØ says Journeaux. ÔÇ£WeÔÇÖve undertaken pre-feasibility studies in Quebec and established KeMag as a subsidiary company for exploring and potentially exploiting the taconite deposits near LabMagÔÇÖs area of operations, just across the border in Quebec. While the KeMag deposits havenÔÇÖt been as well explored, we estimate there are deposits amounting to a little under three billion metric tons. LabMag, which has been more thoroughly investigated, has identified reserves close to six billion metric tons. Looking forward, and based on the amount of drilling we intend to undertake, we hope to establish that thereÔÇÖs a lot more in the KeMag area.ÔÇØ There would seem to be logic behind that hope. The summary geological map of the area NMCC reproduces on its website shows the two main identified deposits running along a single north-northwest axis. But what is the quality of the ore? If it were top grade then itÔÇÖs unlikely that MartinÔÇÖs previous employers would have abandoned it, regardless of the economy in the late 1970s. ÔÇ£WeÔÇÖll have to mine 33 metric ton of magnetite to obtain 10 metric tons of concentrate. ThatÔÇÖs the same ratio as the Mesabi Range in Minnesota, which has been working for around 55 years and has obtained around five billion metric tons of ore. Our resources, calculated under the 43/101 rules, are much larger,ÔÇØ Journeaux says. ÔÇ£When you finish concentrating, you have a high-grade resourceÔÇöaround 69 percent iron, which is close to the 72 percent typical maximum.ÔÇØ So the earlier abandonment of the LabMag ranges becomes understandable. With higher-grade resources available around the world, the cost of conversionÔÇöor rather, the capital cost of the equipment to convertÔÇöwould not have been worthwhile. But that has changed, and NMCC has plans that will make its product very competitive.ÔÇ£The concentrate weÔÇÖll be able to ship will be fine grain, which can be pumped as a slurry in a pipeline rather than having to be transported by rail. When it arrives at the loading port, we expect it will be cheaper than other companies currently in production can deliver,ÔÇØ Journeaux explains. Achieving competitive transportation will involve an ambitious construction project, because an appropriate pipeline does not currently exist. The immediate route is surface hauling to the railhead at Churchill Falls, Labrador, and thence to Pointe-Noire, Quebec, on the St. Lawrence River estuary. Another plan is to build a 230-kilometer pipe to Emeril, where it can be loaded on trains for a shorter journey to Pointe-Noire. The ultimate solution will be a 750-km pipe direct from LabMagÔÇÖs field to Pointe-Noire, which will really bring costs down. But NMCC has another advantage, which will feed through to competitive prices as soon as mining starts.ÔÇ£Other mines were designed and built in the 1950s and ÔÇÖ60s. TheyÔÇÖre smaller and were built within the limitations of the equipment and infrastructure that was available at the time. WeÔÇÖre a new company and are in a position to use more modern, bigger and more efficient equipment,ÔÇØ he says. ÔÇ£That means weÔÇÖll be using less manpower to exploit the resources, which feeds into lower direct costs per metric ton. We also have the advantage that we donÔÇÖt have any legacy costs; we donÔÇÖt have to fund existing pension funds, nor do we have any existing environmental situations.ÔÇØ Currently, NMCC employs just 15 people directly and is working on the development phase with the aid of another 15 semi-permanent consultants, plus specialists in environmental issues, engineering and marketing. ÔÇ£We can employ the best equipment, operate in the most effective way and get the best out of everything, in terms of both capital and human resources,ÔÇØ says Journeaux. ÔÇ£WeÔÇÖre starting with a clean sheet, which is good for our investors, our partners and, ultimately, our customers.ÔÇØ┬á