· june 2012 the canadian business journal 3 new millennium iron iron will ... a $50 million...

nEw mIllEnnIUm Ironwww.nmliron.com

2 eNeRGY & ReSOURCeS � New Millennium Iron

New Millennium Iron02

3JUNe 2012 � The Canadian Business Journal

Iron wIllNew Millennium IronThough it is still a “small” junior miner, New Millennium Iron has heavyweight backing, huge resources and big production goals. 02

EnErGY & rESoUrCES CB


From ItS BEGInnInGS as a capital pool company

in 2003, New Millennium Iron has grown into an

emerging producer controlling one of the largest

iron ore resources in the world – the Millennium

range, a 210km long taconite belt in eastern

Canada.

The company’s direct shipping ore (DSO)

project in partnership with Indian steelmaking

giant Tata Steel is first to development because

of its smaller scale and relatively lower capital

costs. When the DSO project goes into produc-

tion by the end of the year, New Millennium will

become an operating company with near-term

cash flow.

In 2013, the company is targeting 2 million

tonnes (Mt) in production, ramping up to full

capacity of 4.2 million tonnes per year (Mt/y)

in 2014. Tata Steel europe, which has plants in

the UK and Netherlands, has committed to 100

per cent of the offtake at market prices from

Big Span Steel on site. Image c/o www.nmliron.com


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the joint venture company, Tata Steel Minerals

Canada (Tata Steel 80 per cent: New Millen-

nium 20 per cent).

It’s a brownfield development located in the

historic iron ore producing region of Northern

Quebec and Labrador and had been previously op-

erational until the market lost its appetite for lower

quality of ore being produced by the operation.

Dean Journeaux, chief executive of New Mil-

lennium, gets his share of questions on this point

– what makes him think he can do better today?

“The operator closed down the mine in 1982

because for one, the market was bad, but also,

the product was not treated, not upgraded, run-

ning around 58 or 59 per cent iron. We are up-

grading the run of mine ore grade to a 64.5 per

cent iron, in other words, we are meeting today’s

market requirements for quality, and of course,

the price of iron ore has gone up quite a bit since

1982,” Journeaux says.


Tata Steel is arranging financing for up to

C$300 million of the capital costs, with New Mil-

lennium responsible for 20 per cent of the excess.

Human resourcesThe DSO project is just the beginning for the In-

dian steelmaker in Canada, and it will be using

the experience as a tester before considering

the far more significant Taconite project, which

comes with estimated capital costs of between

$4.4 and $5 billion dollars for each of the two

deposits targeted for development.

A $50 million feasibility study, expected to

be completed by the end of the year, is under-

way for the two deposits, KéMag in Quebec

and LabMag in Western Labrador. Tata has an

option to develop either one or both properties,

with New Millennium free to decide what to do

should Tata not go ahead.

LabMag is located about 30km northwest


of the town of Schefferville, Quebec. About

1,800 First Nations people live in the surround-

ing area, a sizeable population that Journeaux

says can go far in meeting the projects’ human

resources needs in the future – the plant opera-

tors, truck drivers, mechanics, electricians and

other supervisory, management and administra-

tive personnel who will be required to maintain

operations.

On the DSO project, the JV, Tata Steel Minerals

Canada, has an impact benefits agreement with

First Nations groups. Apart from employment, the

company is providing training and has donated

$50,000 to run a bursary programme at the re-

gion’s secondary schools.

“I get asked if I am worried about the future

labour supply considering the global skills short-

age and I guess we are, but on the other hand,

we have this tremendous asset in the surround-

ing communities and if we can encourage people

through education and through other means, we

hope it will bring them into the employment pool,”

says Journeaux.

For now, the company estimates that at least

LabMag iron ore deposit. Image c/o www.nmliron.com


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1,000 people will be needed to operate at each of

the deposits while facilities at Schefferville are in-

sufficient to support such an influx of people. As a

result the operation is expected to be fly-in, fly-out.

Taconite technologyLabMag is owned 80 per cent by New Millennium

and 20 per cent by Naskapi Nation of Kawawa-

chikamach through an initial investment, one of

the first such arrangements with a First Nations

group, and KéMag is 100 per cent owned by the

company. Production is expected by the end of

2016, ramping up in 2017 for full production

at 22Mt/y, of which 17Mt/y will be pellets and

5Mt/y will be pellet feed. The company expects

to have grades of 69 per cent in the concentrate

and slightly lower for the pellets.

Journeaux explains that the operation will be

able to make acid and fluxed pellets at various

silica levels for blast furnace use as well as a low

DSO Project - existing pits and dumps Image c/o www.nmliron.com


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gangue direct reduction grade pellet. That, he ex-

plains, means the company can tailor the product

to the demands of the steel industry.

The Taconite project will be an open pit min-

ing operation with a crushing plant, grinding and

magnetic separation facilities with concentrate

transported either by rail or in slurry form via

600km ferroduct to Port of Sept-Iles.

New Millennium is using engineering firm

SNC Lavalin as the study manager for the fea-

sibility study and has also contracted specialist

German firm, Studien Gesellschaft für Eisenerz-

Aufbereitung as its primary metallurgical process

consultant while Midland Research Centre, in

Minnesota, provides crushing, blending and char-

acterisation work of samples.

Journeaux explains that the process to mine

and process Taconite was developed in Minneso-

ta because the US state is home to the massive

Mesabi iron range. Aside from Midland Research

Centre, other Minnesota-based specialists have

been brought on board. Barr engineering will be

doing work on the concentrator and the company

uses the University of Minnesota Coleraine Miner-

als Research laboratory facility.

As with the DSO project, Tata Steel europe is

expected to be a major offtake customer for the

Taconite project as well, taking at least half of the

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product. The rest will be left for the open market.

For that product to reach Asian markets, how-

ever, the Port of Sept Iles will need an upgrade

for a deep water dock capable of handling ships

with 360,000 to 400,000 tonnes of capacity. This

last February, those development plans received

a boost when the Government of Canada an-

nounced financial support of $55 million, or 25

per cent of the project costs, towards construction.

“[The deep water dock] is under detailed plan-

ning right now…we need those larger vessels to

lower freight costs so this is an important factor in

our development plan,” he says.


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Strategic boardIn furthering that development plan towards

production, New Millennium’s board represents

a broad range of backgrounds with experience in

mining, accounting, business and marketing, geol-

ogy, strategy and most recently, commanding the

Canadian Armed Forces.

General (Ret.) Rick Hillier, former Chief of the

Defence Staff, the highest rank of the Canadian

Forces, joined New Millennium’s board in 2011.

If that seems surprising, consider this, what iron

ore project couldn’t use a leader with a steady

resolve who doesn’t waver under pressure?

“He’s managed large groups of people and


facilities, the logistics side, but a good part of the

decision was that he is a Newfoundlander. We

were trying to find somebody with good business

sense, experience and who understands the area

in which we operate, looking down the list [Rick

Hillier’s] name certainly popped,” Journeaux says.

He adds that the high profile appointment is a

welcome boost in furthering the company’s vision

to develop the Millennium Iron range into a world

class mining operation.

“New Millennium is a small junior mining

company on the TSX Exchange but we have these

very large deposits and we see it becoming an-

other Mesabi iron range, which had eight or so

mining operations at one time in different pits.

We have this resource which will last for upwards

of a century and the world’s iron ore resources

are being depleted at a considerable rate, and

also other factors, declining grades, quality. We

have a brand new operation where we will be able

to put out the highest quality products and all of

this purports for a strong future for New Millen-

nium and we hope that one day we will rank in the

larger mining companies in the world, certainly in

iron ore,” Journeaux says. CB

www.nmlIron.Com

AS SEEn In tHE JUnE 2012 ISSUE oF tHE CAnADIAn BUSInESS JoUrnAl

· june 2012 the canadian business journal 3 new millennium iron iron will ... a $50 million...

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