Oceanic Iron Ore Corp. (TSX VENTURE: FEO)(OTCQX: FEOVF) (the
"Company", "Oceanic") is pleased to announce that it has received
the results of a Preliminary Economic Assessment prepared by Micon
International Limited ("Micon") in respect of the Hopes Advance
Project Area ("Hopes Advance"). The PEA was completed using the NI
43-101 Mineral Resource estimate prepared by Micon and reported in
a Company news release on September 21st, 2011.
In addition, the Company is pleased to report initial findings
on metallurgy, port and shipping feasibility and environmental and
social impacts.
Highlights:
Positive Preliminary Economic Assessment on all four production
cases analyzed:
-- "Optimal" case production of 20 million tonnes per annum ("tpa") 66.5%
iron concentrate
-- $3.7 billion initial capital cost inclusive of 25% contingency
-- $2.4 billion initial capital cost for 10 million tpa case
-- Concentrate selling price of $115/tonne
-- Operating cost of $24.58 / tonne of ore pre royalty
-- Waste / ore strip ratio of 1.12
-- 24 year project life from 2016, pre - tax NPV of $10.4 billion, assuming
8% discount rate
-- Pre-tax IRR of 34%, Payback of 2.4 years (post tax, unlevered)
Initial metallurgical testing suggests a very high quality
product with minimal deleterious elements:
-- Two metallurgical programs developed to assess the resource at Hopes
Advance, one program was designed to develop a conceptual flowsheet for
Hopes Advance while the second program was designed to provide weight
recovery and concentrate quality data on composites from drill holes in
Hopes Advance that would subsequently be used to determine the mineral
resources
-- Preliminary metallurgical test results have been received from SGS
Mineral Services, for composites from five diamond drill holes
-- Preliminary results combined with what has been reported historically
suggests mineralization from the Castle Mountain Deposit will respond
well to gravity separation and can readily produce a 4.5 wt.% SiO2
concentrate, with an iron content of +65 wt.%, and an Fe Recovery of
+80%. The preliminary Mozley gravity separation tests suggest it may be
possible to produce a concentrate containing lower SiO2
-- Over the next 3 to 6 months, further results from testwork regarding the
other mineralized areas at Hopes Advance will be released
-- A 200 tonne sample is in the process of being collected and shipped to
SGS Mineral Services for pilot plant testing targeted for completion in
Q2 2012
Marine Facility and Shipping Logistics Study Prepared by AMEC
concludes that:
-- Construction of a marine facility in Hopes Advance Bay is viable
-- Breakwater Point has been identified as an ideal port location in terms
of iron ore shipping logistics and marine facility construction costs
-- Year round shipping to European and Asian markets using Cape size
vessels is feasible
-- The estimated incremental shipping cost from Hopes Advance Bay to
Rotterdam is $5/tonne compared to the cost to ship to Rotterdam from the
port of Sept-Iles. The optimum shipping cost is attained by direct
shipment using ice class vessels from Hopes Advance Bay to Rotterdam
-- The optimum shipping cost from Hopes Advance Bay to China is attained by
direct shipping during summer and through trans-shipment during winter
season. The estimated weighted incremental shipping cost from Hopes
Advance Bay to China ranges between $6 to $8/tonne in comparison to the
shipping cost from Sept-Iles Bay
Golder has produced a report covering first steps of the
Environmental and Social Impact Assessment ("ESIA"):
-- The report reviews the various areas requiring further study including
the importance of continuing to inform and engage the Inuit community
that resides in proximity to the project area, the need to complete a
review of the presence of any species at risk or valued indigenous
species and the potential impact of new infrastructures including energy
sources for the project on the environment and local communities
-- Initial field study data collection in respect of fish habitat, surface
water quality and hydrology has been completed in order to facilitate
target ESIA completion in Q4 2012
-- Initial consultation with Inuit representatives has been completed
Steven Dean, Chairman and CEO, stated: "The results of our
preliminary work has far exceeded our expectations. The combination
of a large tonnage, high NPV deposit at tidewater with some of the
best quality metallurgical characteristics in the Labrador Trough
suggests that Hopes Advance is one of the premier iron development
projects in Canada. In addition to the 25 to 50 year mine life at
Hopes Advance, there is potential significant upside from both the
Roberts Lake and Morgan Lake project areas, which have historic
resources of approximately 1.8 billion tonnes(i). We will continue
to fast track our work on Hopes Advance with pilot testing on a 200
tonne bulk sample as well as delivery of a pre-feasibility study in
Q2 2012."
(i) These are historical resource estimates that do not comply
with the current Canadian Institute of Mining, Metallurgy and
Petroleum Resources (CIM) Definition Standards on Mineral Resources
and Mineral Reserves as required by National Instrument 43-101 (NI
43-101) Standards of Disclosure for Mineral Projects. These
historical resource estimates were described as "drill indicated"
and "potential" at the time of reporting which does not correspond
to the categorization set forth in sections 1.2 and 1.3 of NI
43-101. Although these historical resource estimates are relevant
to support the presence of large areas of iron mineralization,
these estimates are speculative, are based on very limited
exploration drilling and will require extensive new exploration and
metallurgical efforts to validate. They should not be treated as
current mineral resources or reserves or relied upon until
confirmed by current exploration and a Qualified Person. A
Qualified Person has not done sufficient work to upgrade or
classify these historical resource estimates as current NI-43-101
compliant mineral resources. The Roberts Lake historic resource was
reported in 1970 from drilling in the late 1950s and the Morgan
Lake historic resource was reported in 1957 and 1964. Further
information in respect of these historic resources is outlined in a
43-101 technical report prepared by Micon entitled "Technical
Report on the Ungava Iron Property - Ungava Bay Region, Quebec,
Canada" dated Oct. 29, 2010, available on SEDAR.
Preliminary Economic Assessment
The PEA for Hopes Advance outlines four potential project
scenarios:
-- Scenario 1 assumes production of 10 million tpa of 66.5% iron
concentrate;
-- Scenario 2 assumes production of 20 million tpa of 66.5% iron
concentrate;
-- Scenario 3 assumes production of 20 million tpa of iron pellets
-- Scenario 4 assumes production of 10 million tpa of 66.5% iron
concentrate and 10 million tpa iron pellets
In all four scenarios, the PEA demonstrates positive project
economics. The Company will continue to study each alternative in
detail through the pre-feasibility study stage prior to making a
final decision as to the optimal scenario at the feasibility study
stage.
The PEA has been based on the 43-101 Mineral Resource estimate
as set out below, prepared by Micon and reported in a Company news
release on September 21, 2011.
Table 1 - NI 43-101 In-Pit Mineral Resource Estimate Hopes Advance Bay (25%
Cut-off)
----------------------------------------------------------------------------
Category Tonnes Total Fe (%) Weight Recovery (%)
----------------------------------------------------------------------------
Indicated 358,362,000 31.8% 38.2%
----------------------------------------------------------------------------
Inferred 872,423,000 32.4% 39.0%
----------------------------------------------------------------------------
The PEA is preliminary in nature and it includes inferred
mineral resources that are considered too speculative geologically
to have the economic considerations applied to them that would
enable them to be categorized as mineral reserves, and there is no
certainty that the conclusions in the PEA will be realized. As
noted above, the interim mineral resource estimate is expected to
be updated before the year-end to take into account analysis on
holes that have not yet reported. As a result, there is potential
to enhance the project's economics if increases in the compliant
mineral resources or upgrading of certain inferred resources to the
indicated or measured category are achieved.
The tables below list the key PEA metrics. The analysis is based
on the assumption that production would begin in 2016.
Table 2 - PEA Results (Pre-tax)
----------------------------------------------------------------------------
Scenario 4
Scenario 1 Scenario 2 Scenario 3 10m tpa con
Category 10m tpa con 20m tpa con 20m tpa pellet 10m tpa pellet
----------------------------------------------------------------------------
Price $115 / tonne con
assumption $115 / tonne $115 / tonne $150 / tonne $150 / tonne pellet
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Pre-tax NPV
(8%) $5.5 billion $10.4 billion $12.0 billion $11.0 billion
----------------------------------------------------------------------------
Pre tax IRR
(%) 26.9% 34.0% 26.2% 28.4%
----------------------------------------------------------------------------
Payback
(years)(i) 3.1 years 2.4 years 3.25 years 3.0 years
----------------------------------------------------------------------------
Mine Life
(years) 47.7 23.8 25.9 24.8
----------------------------------------------------------------------------
Initial
Capital Costs $2.4 billion $3.7 billion $6.4 billion $5.2 billion
----------------------------------------------------------------------------
Strip ratio 1.12 1.12 1.12 1.12
----------------------------------------------------------------------------
(i) post tax, unlevered
As noted above, the PEA assumes a concentrate selling price of
$115/tonne and also takes into consideration the 2% NSR payable to
the vendors of the project. The Company can purchase 1% of the NSR
payable to the vendors at any time within the first two years of
commencement of commercial production for a one-time payment of CAD
$3 million.
In Scenario 2, the Company's "Optimal Case", reducing the
concentrate selling price to $85/tonne results in a pre-tax NPV of
$6.0 billion, assuming 8% discount rate, pre-tax IRR of 24.6% and
payback of 3.5 years.
Total capital costs by scenario are set out below:
Table 3 - Initial Capital Costs
Scenario 4
Scenario 1 Scenario 2 Scenario 3 10m tpa con
10m tpa con 20m tpa con 20m tpa pellet 10m tpa pellet
$000 $000 $000 $000
----------------------------------------------------------------------------
Mine
(Equipment) 194,673 351,202 351,202 351,202
Mine
(Development) 38,935 70,240 70,240 70,240
Crusher 44,600 88,000 88,000 88,000
Concentrator 515,900 965,900 965,900 965,900
Pelletizer - - 1,634,331 854,374
Pipeline 35,532 43,666 43,666 43,666
Hydro -
electric power 480,000 540,000 600,000 600,000
Concentrate
Storage (at
Port) 60,000 122,000 122,000 122,000
Port 258,000 294,000 294,000 294,000
Site Roads 15,306 15,306 15,306 15,306
Camp 82,240 126,760 180,280 180,280
Airstrip 3,500 3,500 3,500 3,500
Fresh Water
Supply 3,500 4,618 5,804 5,804
Sewage 5,400 7,126 8,955 8,955
Waste Disposal 2,100 2,771 3,482 3,482
Office Complex 9,000 11,748 14,168 14,168
Communications 1,000 1,000 1,000 1,000
Mobile
Equipment 5,000 6,000 8,000 8,000
Indirect (EPCM,
Closure) 204,509 358,905 926,195 659,471
Contingency 438,672 663,459 1,102,459 907,469
----------------------------------------------------------------------------
Total CAPEX $ 2,397,867 $ 3,676,201 $ 6,438,487 $ 5,196,817
----------------------------------------------------------------------------
A conceptual diagram outlining the project layout is set out
below. As illustrated, the deposits are optimally located
approximately 20 km from the potential port site at Pointe
Breakwater (discussed in more detail below) such that a pipeline
will run from the concentrator, expected to be placed in proximity
to all deposits, to the port.
Pelletizing equipment would be located at the port site should
the Company decide to produce a pellet finished product. Green
hydroelectric power is expected to be run from one of the existing
operational power reservoirs in closest proximity to Ungava
Bay.
As highlighted in its September 20, 2011 news release, the
Company is working alongside Makivik Corporation, the Quebec
provincial government and Quebec Hydro in respect of a solution to
the delivery of power both to the Company's project areas and to
local communities in a timescale to suit the development of the
Company's projects.
To view Figure 1 - Hopes Advance Conceptual Layout, please click
on the following link:
http://media3.marketwire.com/docs/feo922i.pdf.
A summary of operating costs by scenario is set out below:
Table 4 - Operating Costs (excluding royalty)
----------------------------------------------------------------------------
Scenario 1 Scenario 2 Scenario 3 Scenario 4
----------------------
10m tpa 20m tpa 20m tpa 10m tpa 10m tpa
Category con con pellet con pellet
----------------------------------------------------------------------------
Mining
($/tonne all
material) $1.96 $1.89 $1.89 $1.89 $1.89
----------------------------------------------------------------------------
Mining
($/tonne product) $10.71 $10.36 9.54 $10.27 $9.62
Concentrator ($/tonne
product) $10.67 $9.73 $8.96 $9.73 $8.96
Pipeline
($/tonne product) $0.25 $0.21 $0.19 $0.21 $0.19
Pelletizer
($/tonne pellets) N/A N/A $14.12 N/A $14.99
Port
($/tonne product) $2.13 $1.45 $1.45 $1.45 $1.45
Camp and
Infrastructure
($/tonne product) $2.24 $1.73 $2.23 $2.23 $2.23
G&A (Site only)
($/tonne product) $1.84 $1.11 $1.24 $1.24 $1.24
----------------------------------------------------------------------------
Total operating cost
/tonne product
(excl royalty) $27.85 $24.58 $37.74 $25.13 $38.70
----------------------------------------------------------------------------
Metallurgy
Metallurgical Programs
Two metallurgical programs were developed to assess the resource
at Hopes Advance. One program was designed to develop a conceptual
flowsheet for Hopes Advance while the second program was designed
to provide weight recovery and concentrate quality data on
composites from drill holes at Hopes Advance that would
subsequently be used to determine the ore resource. Approximately
800 composites will be analyzed for ore characterization
purposes.
FL Smidth was contracted to develop a conceptual flowsheet for
Hopes Advance. The conceptual flowsheet will be developed from
grind-grade, shaker table and Davis Tube tests. The shaker table
simulates spiral performance and the Davis Tube simulates low
intensity magnetic separation (LIMS). FL Smidth will provide an
overall process flowsheet and an analysis of process alternatives
for the comminution and iron upgrade unit operations. The samples
for the FL Smidth flowsheet development test work were collected
from the historic bulk sample trenches at Castle Mountain. Results
from FL Smidth are expected in early October.
SGS Mineral Services was contracted to determine weight recovery
and concentrate grade information on composites from Hopes Advance.
Since the Castle Mountain Deposit contains both hematite and
magnetite (hematite greater than magnetite), a program was designed
to simulate recoveries that could be expected in a concentrating
plant using gravity separation followed by regrinding and LIMS.
Gravity separation tests by Mozley table were conducted first to
recover hematite and coarse magnetite. Davis Magnetic Tube Tests
were then conducted on the tail from the gravity tests to recover
the remaining magnetite following additional grinding to liberate
the magnetite.
Initial Metallurgical Test Results
Preliminary metallurgical test results have been received from
SGS Mineral Services for composites from five diamond drill holes
(HA-11-001b, HA-11-002, HA-11-003, HA-11-007, and HA-11-008) from
the Castle Mountain Deposit. Grind grade tests indicated good
hematite and magnetite liberation is achieved with a relatively
coarse grind. Preliminary results for the gravity separation tests
have been received and are summarized below. The concentrate
results have been adjusted to reflect a 4.5wt.% SiO2, that is
desirable for iron ore pellet production, because SiO2 grades lower
than 4.5wt.% were achieved in many instances at the target grind.
At this time, the results of the Davis Magnetic Tube Tests on the
Mozley table tails have not been received. Satmagan analyses of the
Mozley table tails indicate that in many instances most of the
magnetite is recovered by gravity separation. This appears to be
due to the recovery of relatively fine grained magnetite by gravity
separation which typically occurs when fine grained magnetite is
intergrown with hematite, and when magnetite grains grow together
forming coarser magnetite aggregates.
The Mozley tests indicate that the ore from the Castle Mountain
Deposit will respond well to gravity separation and can readily
produce a 4.5wt.% SiO2 concentrate, with an iron content of +65
wt.%, and an Fe Recovery of +80%. The preliminary Mozley tests
suggest it may be possible to produce a lower SiO2 concentrate.
Mozley table concentrates have very low levels of deleterious
elements (Table 7).
Table 5 - Preliminary Results from Gravity Separation Tests Target 4.5% SiO2
----------------------------------------------------------------------------
Head Grade Concentrate Grade
----------------------------------------------------------------------------
Drill Hole From To Thick Total Fe Sat Total FeTarget SiO2(i) Fe Rec.
----------------------------------------------------------------------------
HA-11-001b 58.00 73.00 15.00 29.5 17.3 63.7 4.5 72.3
----------------------------------------------------------------------------
HA-11-001b 73.00 101.00 28.00 37.1 6.5 64.0 4.5 87.3
----------------------------------------------------------------------------
HA-11-001b 101.00 115.40 14.40 28.5 3.5 64.9 4.5 85.9
----------------------------------------------------------------------------
HA-11-001b 115.40 121.00 5.60 21.1 9.6 63.4 4.5 82.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
HA-11-002 30.60 38.00 7.40 28.9 27.1 65.4 4.5 81.1
----------------------------------------------------------------------------
HA-11-002 45.10 67.00 21.90 33.4 14.2 66.6 4.5 78.9
----------------------------------------------------------------------------
HA-11-002 95.00 102.00 7.00 36.5 10.9 64.2 4.5 88.6
----------------------------------------------------------------------------
HA-11-002 102.00 114.00 12.00 37.6 2.1 64.8 4.5 85.8
----------------------------------------------------------------------------
HA-11-002 114.00 136.00 22.00 30.2 2.8 65.3 4.5 84.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
HA-11-003 36.85 44.40 7.55 28.7 29.6 66.4 4.5 65.3
----------------------------------------------------------------------------
HA-11-003 44.40 68.00 23.60 34.6 10.2 66.1 4.5 75.4
----------------------------------------------------------------------------
HA-11-003 68.00 88.00 20.00 36.2 5.1 65.3 4.5 82.1
----------------------------------------------------------------------------
HA-11-003 88.00 96.70 8.70 33.6 2.7 64.8 4.5 77.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
HA-11-007 0.20 23.00 22.80 36.5 19.7 65.1 4.5 83.3
----------------------------------------------------------------------------
HA-11-007 23.00 29.00 6.00 36.7 11.8 65.7 4.5 84.8
----------------------------------------------------------------------------
HA-11-007 29.00 50.10 21.10 31.9 14.1 64.4 4.5 83.1
----------------------------------------------------------------------------
HA-11-007 50.10 64.40 14.30 24.8 19.3 66.3 4.5 76.8
----------------------------------------------------------------------------
----------------------------------------------------------------------------
HA-11-008 11.70 23.30 11.60 32.3 28.0 66.8 4.5 73.9
----------------------------------------------------------------------------
HA-11-008 23.30 52.00 28.70 35.3 10.9 66.6 4.5 77.5
----------------------------------------------------------------------------
HA-11-008 52.00 69.15 17.15 31.5 4.5 64.5 4.5 78.9
----------------------------------------------------------------------------
HA-11-008 69.15 75.10 5.95 20.3 9.2 64.8 4.5 70.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i)Presents either the Mozley concentrate, or a combination of the
concentrate with the middlings in order to generate a product as close as
possible to the target 4.5% SiO2.
----------------------------------------------------------------------------
Table - 6 - Mozley Table Concentrates
----------------------------------------------------------------------------
Head Grade Concentrate Grade
----------------------------------------------------------------------------
Drill Hole From To Thick Fe Sat Fe SiO2 Fe Rec.
----------------------------------------------------------------------------
HA-11-001b 58.00 73.00 15.00 29.5 17.3 67.7 2.3 68.2
----------------------------------------------------------------------------
HA-11-001b 73.00 101.00 28.00 37.1 6.5 65.0 3.8 86.4
----------------------------------------------------------------------------
HA-11-001b 101.00 115.40 14.40 28.5 3.5 66.0 3.7 83.0
----------------------------------------------------------------------------
HA-11-001b 115.40 121.00 5.60 21.1 9.6 66.1 1.6 81.4
----------------------------------------------------------------------------
----------------------------------------------------------------------------
HA-11-002 30.60 38.00 7.40 28.9 27.1 66.4 3.8 79.8
----------------------------------------------------------------------------
HA-11-002 45.10 67.00 21.90 33.4 14.2 68.8 2.0 77.4
----------------------------------------------------------------------------
HA-11-002 95.00 102.00 7.00 36.5 10.9 66.1 2.4 87.9
----------------------------------------------------------------------------
HA-11-002 102.00 114.00 12.00 37.6 2.1 65.8 3.6 84.0
----------------------------------------------------------------------------
HA-11-002 114.00 136.00 22.00 30.2 2.8 67.5 2.3 82.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
HA-11-003 36.85 44.40 7.55 28.7 29.6 68.7 2.1 63.1
----------------------------------------------------------------------------
HA-11-003 44.40 68.00 23.60 34.6 10.2 66.3 4.4 75.2
----------------------------------------------------------------------------
HA-11-003 68.00 88.00 20.00 36.2 5.1 69.5 1.0 80.3
----------------------------------------------------------------------------
HA-11-003 88.00 96.70 8.70 33.6 2.7 66.3 2.8 76.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
HA-11-007 0.20 23.00 22.80 36.5 19.7 68.3 1.5 80.5
----------------------------------------------------------------------------
HA-11-007 23.00 29.00 6.00 36.7 11.8 68.0 1.9 83.6
----------------------------------------------------------------------------
HA-11-007 29.00 50.10 21.10 31.9 14.1 64.9 4.1 82.6
----------------------------------------------------------------------------
HA-11-007 50.10 64.40 14.30 24.8 19.3 69.9 1.3 72.3
----------------------------------------------------------------------------
----------------------------------------------------------------------------
HA-11-008 11.70 23.30 11.60 32.3 28.0 68.9 2.2 72.7
----------------------------------------------------------------------------
HA-11-008 23.30 52.00 28.70 35.3 10.9 65.6 5.6 78.3
----------------------------------------------------------------------------
HA-11-008 52.00 69.15 17.15 31.5 4.5 68.1 1.5 73.6
----------------------------------------------------------------------------
HA-11-008 69.15 75.10 5.95 20.3 9.2 64.3 5.2 70.8
----------------------------------------------------------------------------
Table 7 - Mozley Table Concentrates Assays of Elements of Interest
----------------------------------------------------------------------------
From To Thick Al2O3 MgO CaO Na2O K2O TiO2 P2O5 MnO
----------------------------------------------------------------------------
HA-11-001b less less less less less
than than than than than
58.00 73.00 15.00 0.01 0.18 0.26 0.01 0.01 0.01 0.01 0.04
----------------------------------------------------------------------------
HA-11-001b less less less less less
than than than than than
73.00 101.00 28.00 0.01 0.15 0.40 0.01 0.01 0.01 0.01 0.26
----------------------------------------------------------------------------
HA-11-001b less less less less
than than than than
101.00 115.40 14.40 0.01 0.01 0.09 0.01 0.01 0.01 0.01 0.04
----------------------------------------------------------------------------
HA-11-001b less less less less
than than than than
115.40 121.00 5.60 0.01 0.14 0.30 0.01 0.01 0.01 0.01 0.03
----------------------------------------------------------------------------
----------------------------------------------------------------------------
HA-11-002 less less less less less
than than than than than
30.60 38.00 7.40 0.01 0.15 0.23 0.01 0.01 0.01 0.01 0.02
----------------------------------------------------------------------------
HA-11-002 less less less less less
than than than than than
45.10 67.00 21.90 0.01 0.02 0.06 0.01 0.01 0.01 0.01 0.02
----------------------------------------------------------------------------
HA-11-002 less less less less
than than than than
95.00 102.00 7.00 0.01 0.19 0.48 0.01 0.01 0.01 0.01 0.26
----------------------------------------------------------------------------
HA-11-002 less less less less
than than than than
102.00 114.00 12.00 0.01 0.06 0.28 0.01 0.01 0.01 0.01 0.83
----------------------------------------------------------------------------
HA-11-002 less less less
than than than
114.00 136.00 22.00 0.02 0.06 0.36 0.01 0.01 0.01 0.01 0.13
----------------------------------------------------------------------------
----------------------------------------------------------------------------
HA-11-003 less less less less
than than than than
36.85 44.40 7.55 0.02 0.19 0.14 0.01 0.01 0.01 0.01 0.02
----------------------------------------------------------------------------
HA-11-003 less less less less
than than than than
44.40 68.00 23.60 0.04 0.03 0.10 0.01 0.01 0.01 0.01 0.02
----------------------------------------------------------------------------
HA-11-003 less less less
than than than
68.00 88.00 20.00 0.02 0.01 0.07 0.02 0.01 0.01 0.01 0.06
----------------------------------------------------------------------------
HA-11-003 less less less less
than than than than
88.00 96.70 8.70 0.03 0.08 0.28 0.01 0.01 0.01 0.01 0.41
----------------------------------------------------------------------------
----------------------------------------------------------------------------
HA-11-007 less less less less
than than than than
0.20 23.00 22.80 0.02 0.13 0.46 0.01 0.01 0.01 0.01 0.24
----------------------------------------------------------------------------
HA-11-007 less less less less less
than than than than than
23.00 29.00 6.00 0.01 0.06 0.16 0.01 0.01 0.01 0.01 0.11
----------------------------------------------------------------------------
HA-11-007 less less less
than than than
29.00 50.10 21.10 0.05 0.08 0.21 0.01 0.01 0.02 0.01 0.40
----------------------------------------------------------------------------
HA-11-007 less less less
than than than
50.10 64.40 14.30 0.03 0.06 0.15 0.01 0.01 0.01 0.01 0.04
----------------------------------------------------------------------------
----------------------------------------------------------------------------
HA-11-008 less less less less less
than than than than than
11.70 23.30 11.60 0.01 0.09 0.29 0.01 0.01 0.01 0.01 0.08
----------------------------------------------------------------------------
HA-11-008 less less less
than than than
23.30 52.00 28.70 0.03 0.13 0.42 0.02 0.01 0.01 0.01 0.17
----------------------------------------------------------------------------
HA-11-008 less less less
than than than
52.00 69.15 17.15 0.01 0.05 0.32 0.01 0.01 0.01 0.01 0.24
----------------------------------------------------------------------------
HA-11-008 less less less less
than than than than
69.15 75.10 5.95 0.04 0.40 1.13 0.01 0.01 0.01 0.01 0.10
----------------------------------------------------------------------------
Historical Metallurgical Testing
Considerable metallurgical work was done on Hopes Advance in the
late 1950's. This metallurgical work was used to design a flowsheet
using spirals followed by LIMS. Most of the historic resource
estimate was based on soluble iron assays supplemented with
metallurgical work on a few drill holes, and the results of
metallurgical testing on a bulk sample from Castle Mountain. A
summary report by Lone Star published in 1973 demonstrates that
concentrate weight recoveries of 40 percent at 5 percent silica
were achieved with the spirals and magnetite separation alone. The
results from the current metallurgical test work confirm the
historic metallurgical work in that the iron in both the hematite
and magnetite ore is largely recovered by gravity due to the
apparent inter-grown magnetite with the hematite and the
aggregation of magnetite grains.
Continuing Metallurgical Testing
Metallurgical data from the remaining composites should be
received over the next three months. The conceptual flowsheet
should be received from FL Smidth in early October. Discussions
have been held with prospective labs for a pilot plant test. A 200
tonne bulk sample is being collected in anticipation of a pilot
plant test program targeted for completion in Q2 2012.
Marine Logistics Study
The Company has engaged AMEC Environment & Infrastructure, a
Division of AMEC Americas Limited ("AMEC") to identify a location
for a port facility in Hope Advance Bay and prepare an initial
report as to the feasibility of the construction of the facility at
Breakwater Point.
As part of the Hopes Advance Bay Marine Facility initial report,
the following tasks were performed:
-- Identified, evaluated and selected the optimum location for the Hopes
Advance marine facility;
-- Established marine terminal configuration at the selected location;
-- Proposed and evaluated iron ore ocean shipping logistics to European and
Asian mills;
-- Established onshore infrastructure required for port operation;
-- Executed Hopes Advance Bay bathymetric survey;
-- Established Ungava Bay and Hopes Advance Bay environmental conditions;
The marine design basis for the port infrastructure heavily
relies on oceanographic environmental conditions present within
Ungava Bay. The shoreline experiences Nordic climate conditions
through the calendar year. A tidal water level fluctuation of 13.6m
is used for wharf design. In comparison the world's highest tidal
ranges of 16.8m occur in Leaf Basin for Ungava Bay and 17.0m at
Burntcoat Head for Bay of Fundy.
The proposed port location at Breakwater Point has been chosen
based on distance from the concentrator, onshore area topography,
distances to deep waters, optimal ship navigation and minimal
exposure to open sea conditions. From the conducted bathymetric
survey by Aquatics ESI the proposed port location has shown
adequate deep waters for wharf construction suitable for Cape Size
vessels. Deep waters are present just after the tidal flats of
Breakwater Point, thus creating an ideal location for port
construction.
For this phase of the project, two shipping destinations are
analyzed: Rotterdam and Qingdao Port. Due to the Nordic weather
conditions two shipping seasons are defined as follows: Ice free
season from mid June - mid November (150 days) and Ice season from
mid November - mid June (215 days). The bulk material can either be
shipped through direct shipment to final destination or through
trans-shipment in the fjord in Nuuk, Greenland during the ice
season. Optimal shipment to Europe is through direct shipment with
ice class or blue water vessels. Export to China shall be completed
with the trans-shipment option in Greenland with increased export
in the ice free season to 50% of total annual production of the
mine. However during the ice free season direct shipment to China
is the most economical option.
Total CAPEX and OPEX estimates for port construction and
maintenance have been assessed for the defined service life of 30
years. The CAPEX direct cost for marine infrastructure including
the iron ore wharf was estimated at $258M (10Mt/y production) and
$294M (20Mt/y production). Additional stockyard CAPEX direct costs
are $60M (10Mt/y production) and $122M (20Mt/y production).
Operating costs for the port are summarized in the PEA section
above.
As a result of their work to date, AMEC has concluded that:
-- Construction of a marine facility in Hopes Advance Bay is viable,
-- Breakwater Point has been identified as an ideal port location in terms
of iron ore shipping logistics and marine facility construction cost,
-- Year round shipping to European and Asian markets using Cape size
vessels is feasible,
-- The estimated incremental shipping cost from Hopes Advance Bay to
Rotterdam is $5/tonne in comparison to shipping cost from Sept-Iles Bay.
The optimum shipping cost is attained by direct shipment using ice class
vessels from the Hopes Advance Bay to Rotterdam,
-- The optimum shipping cost from Hopes Advance Bay to China is attained by
direct shipping during summer and through trans-shipment during winter
season. The estimated weighted incremental shipping cost from Hopes
Advance Bay to China ranges between $6 to $8/tonne in comparison to
shipping cost from Sept-Iles Bay.
Further work on the marine facility and shipping options will be
completed in the coming months, including:
-- Confirmation of exact transshipment location within the fjord near Nuuk,
Greenland. Contact Greenland Port Authorities (Government of Greenland:
Bureau of Minerals & Petroleum and the Royal Danish Navy) to confirm
transshipment cost;
-- Initiation of ice measurement program for the Hopes Advance Area;
-- Initiation of Geotechnical Investigation to collect design parameters
for dredging requirements, caisson and causeway designs;
-- Further investigation of shipping distance, route, type of shipping
contracts, export volume, oil prices and port charges to support work on
export costs;
-- Availability of ice class vessels for the project and shipping costs;
-- Optimization of winter/summer shipping volumes to optimize shipping
cost.
Environmental
The Company has engaged Golder Associates of Montreal ("Golder")
to advance the work necessary to produce an ESIA on Hopes Advance.
Golder has completed an initial report entitled "INTEGRATING
ENVIRONMENTAL AND SOCIAL CONSIDERATIONS IN THE HOPES ADVANCE
PROJECT - A FIRST OVERVIEW". This report summarizes the first steps
of the ESIA in relation to Hopes Advance.
The report reviewed the various areas requiring further study
including the importance of continuing to inform and engage the
Inuit community that resides in proximity to the project area, the
need to complete a review of the presence of any species at risk or
valued indigenous species and the potential impact of new
infrastructures including energy sources for the project on the
environment and local communities.
The report also notes that Golder has recently completed its
first field survey and data collection at Hopes Advance, focused on
aquatic habitats and that Golder has initiated consultations with
the Inuit people, having now met with representatives of both
Makivik Corporation and Aupaluk Landholdings, to exchange
information about the environmental and social studies undertaken
by the Company as well as increase the understanding of traditional
land-use within the project study area. Golder is planning
additional desktop work and consultations in the coming months as
well as additional field surveys with targeted completion for an
ESIA in the fourth quarter of 2012.
Next Steps
The complete report in respect of the PEA including further
detail on metallurgy, marine logistics and environmental review
will be filed on SEDAR and on the Company's website within 45 days
of this news release.
Over the coming months, the Company will be focused on:
-- Resource estimate update in respect of Hopes Advance targeted by year
end 2011;
-- Resource estimate from the Roberts Lake / Kayak Bay area targeted in the
first quarter of 2012;
-- Pre-feasibility study in respect of Hopes Advance targeted for Q2 2012;
-- Environmental and Social Impact Assessment expected in Q4 2012;
-- Feasibility study targeted in the first half of 2013.
In addition, the Company will continue its work at all levels of
government and with Inuit representatives to ensure good
communication and dialogue; and that its infrastructure
requirements are understood and implemented in a timely manner to
support the development of its Ungava Bay project areas.
Eddy Canova, P.Geo. (Q403), the Exploration Manager for the
Company and a Qualified Person as defined by NI 43-101, has
reviewed and is responsible for the technical information contained
in this news release.
OCEANIC IRON ORE CORP. (www.oceanicironore.com)
On behalf of the Board of Directors
Steven Dean, Chairman and Chief Executive Officer
This news release includs certain "Forward-Looking Statements"
as that term is used in applicable securities law. All statements
included herein, other than statements of historical fact,
including, without limitation, statements regarding potential
mineralization and resources, exploration results, and future plans
and objectives of Oceanic Iron Ore Corp. ("Oceanic", or the
"Company"), are forward-looking statements that involve various
risks and uncertainties. In certain cases, forward-looking
statements can be identified by the use of words such as "plans",
"expects" or "does not expect", "scheduled", "believes", or
variations of such words and phrases or statements that certain
actions, events or results "potentially", "may", "could", "would",
"might" or "will" be taken, occur or be achieved. There can be no
assurance that such statements will prove to be accurate, and
actual results could differ materially from those expressed or
implied by such statements. Forward-looking statements are based on
certain assumptions that management believes are reasonable at the
time they are made. In making the forward-looking statements in
this presentation, the Company has applied several material
assumptions, including, but not limited to, the assumption that:
(1) there being no significant disruptions affecting operations,
whether due to labour/supply disruptions, damage to equipment or
otherwise; (2) permitting, development, expansion and power supply
proceeding on a basis consistent with the Company's current
expectations; (3) certain price assumptions for iron ore; (4)
prices for availability of natural gas, fuel oil, electricity,
parts and equipment and other key supplies remaining consistent
with current levels; (5) the accuracy of current mineral resource
estimates on the Company's property; and (6) labour and material
costs increasing on a basis consistent with the Company's current
expectations.
Important factors that could cause actual results to differ
materially from the Company's expectations are disclosed under the
heading "Risk Factors" in the Company's Filing Statement dated
November 22, 2010 (a copy of which is publicly available on SEDAR
at www.sedar.com under the Company's profile) and elsewhere in
documents filed from time to time, including MD&A, with the
Toronto Stock Exchange and other regulatory authorities. Such
factors include, among others, risks related to the ability of the
Company to obtain necessary financing and adequate insurance; the
economy generally; fluctuations in the currency markets;
fluctuations in the spot and forward price of iron ore or certain
other commodities (e.g., diesel fuel and electricity); changes in
interest rates; disruption to the credit markets and delays in
obtaining financing; the possibility of cost overruns or
unanticipated expenses; employee relations. Accordingly, readers
are advised not to place undue reliance on Forward-Looking
Statements. Except as required under applicable securities
legislation, the Company undertakes no obligation to publicly
update or revise Forward-Looking Statements, whether as a result of
new information, future events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Oceanic Iron Ore Corp. Steven Dean Chairman and Chief
Executive Officer +1 604 566 9080 +1 604 566 9081 (FAX)
www.oceanicironore.com
Oceanic Iron Ore (PK) (USOTC:FEOVF)
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