IRON ORE: Fire Lake PFS has $3.3 billion NPV and 30.9% IRR for West and East deposits

QUEBEC – Champion Iron Mines of Toronto says the pre-feasibility study for the West and East deposits at its Consolidated Fire Lake North project points toward a net present value (8% discount) of $3.30 billion and a pre-tax internal rate of return of 30.9%. After a pre-production capital expenditure of $1.39 billion, the project has a payback period of 3.4 years. A mine life of 19.6 years is contemplated.

Start-up of the Fire Lake concentrator could come as early as Q1 2015 with normal production rates beginning the following quarter. The concentrator is designed with an output of 9.3 million t/y of iron concentrate grading 66% Fe. The optimized pit designs contain proven and possible reserves of 464.6 million tonnes grading 32.37% Fe at a 15% Fe cut-off.

Champion noted that project costs have escalated since the preliminary economic assessment was done in late 2011. Rail costs are up to $1.33 billion from $275.4 million. Concentrator and site costs have increased by $145.9 million to support increased production capacity of 10 million t/y and a dual voltage substation. Costs for the port at Pointe Noire are up $109.8 million because the storage location was moved. Environmental costs are up $83.4 million cut to underestimation in the PEA. Lastly, the PFS calls for purchasing mining equipment at a cost of $55.4 million rather than leasing it.

The Fire Lake North project is located 60 km southwest of Fermont and 250 km north of Port-Cartier. More information is available at ChampionIronMines.com.