New Millennium Iron Corp. (“NML” or the “Company”) (TSX: NML) is
pleased to report on initiatives taken in recent months to adapt to
changed market conditions.
The Company also announces the study with
assistance from independent advisors of new business opportunities
aimed at diversifying its iron ore and infrastructure interests. To
this end, Cairn Merchant Partners (“Cairn”) has been retained by
NML to provide advisory services and analytical support to the new
business initiative. In addition, a Special Committee of
independent Directors has been formed to assist management and
Cairn in reviewing opportunities and to make recommendations to the
Board.
As the Canadian junior mining sector gradually
recovers from the challenging commodity and capital markets of
recent years, NML emerges in improved financial condition and able
to consider strategies that can deliver nearer-term benefits to
shareholders.
Focus on Stabilization
NML has more recently focused on stabilizing the
Company’s finances through a rigorous program of cash
conservation. Along with a significant reduction in
expenditures through restructuring, an investment program initiated
by specialist members of the Board has enabled the Company’s
operations to be essentially cash neutral.
Working interactively with the Board to manage
business priorities and general activity is a small, Montreal-based
team, to which Robert P. Boisjoli was last month appointed as the
Company’s CFO. Mr. Boisjoli is a founder of two companies and
a board member of several public and private companies as well as
non-profit organizations.
Port of Sept-Îles
An important achievement for NML was the
December 2017 settlement of a disputed July 2012 contract with the
Sept-Îles Port Authority (“Port”), which eliminated a long-term
obligation while preserving the Company’s access rights to shipping
capacity at the Port’s new multi-user wharf now in service.
This led to NML being able in November to
complete the earlier announced sale of a portion of its reserved
multi-user wharf capacity at the Port for $4 million in cash and a
20-year income stream from iron ore shipping fees expected to begin
in 12 to 24 months, with the Company retaining sufficient capacity
to support future development of its taconite iron ore
properties.
Iron Ore
NML’s roots are in iron ore and the Company
continues to closely monitor market trends and events. NML
remains well positioned to supply the global iron and steel
industry from an extensive property position in the Labrador Trough
featuring long-life, NI 43-101 compliant taconite reserves and
resources that have been the subject of comprehensive feasibility
work. The technical and engineering aspects are known and
ready for discussion with potential partners and investors as and
when market conditions permit.
The market environment remains challenging for
greenfield projects such as the development of NML’s taconite
deposits, but changed dynamics in the form of migration to higher
quality iron ore in the world’s largest market, China, and
elsewhere, have brought iron and steelmaker attention back to the
uniquely attractive iron ore chemistry featured in the Labrador
Trough.
NML participates in an active project in the
region through its investment in Tata Steel Minerals Canada, which
is now completing an iron ore beneficiating plant that will not
only add high-grade ore to an established direct shipping ore
product mix, but also year-round production capability, versus
today’s shorter, seasonal operation.
Also of note is that the pellet segment of the
iron ore market targeted by NML, for which the Company’s taconite
ores are ideally suited, is presently very tight due to supply side
constraints. Important support for eastern
Canadian iron ore has been provided by the Quebec Government’s
investment in restart project activity and infrastructure.
NML has been a beneficiary through its previously mentioned
Port-related transactions.
These developments are positive and important
contributors to both NML’s liquidity and positioning for the
future, but production from the taconite properties is still some
time away. The capital cost, long lead times for further
marketing, permitting, community agreements, construction and
ramp-up associated with our large-scale, mainly greenfield project
undertaking all require a long-term perspective and
commitment.
While NML considers new initiatives, the Company
and its largest shareholder, Tata Steel, are reviewing their
possible approaches with respect to the taconite properties.
About New Millennium
NML is a Canadian iron ore exploration,
evaluation and development company with an extensive property
position called the Millennium Iron Range (“MIR”) in Canada’s
principal iron ore district, the Labrador Trough, straddling the
Province of Newfoundland and Labrador and the Province of Quebec,
in the Menihek Region around Schefferville, Quebec. The
Company’s project areas are connected via a well-established,
heavy-haul rail network to the Port of Sept-Îles, Quebec.
Tata Steel Limited (“Tata Steel”), a global
steel producer and industry leader, owns approximately 26.2% of the
Company and is the Company’s largest shareholder.
NML has a 4.32% interest in Tata Steel Minerals
Canada Ltd. (“TSMC”), which is owner and operator of a direct
shipping ore (“DSO”) project near Schefferville. The DSO project
produces and ships sinter fines. Subsidiaries of Tata Steel
and the Quebec Government’s financing arm, Investissement Québec,
own the remainder of TSMC.
Beyond TSMC, the Company offers further
development potential through a group of long-life taconite
properties capable of producing high quality pellets and pellet
feed to service the requirements of steel makers with either blast
furnace or direct reduced iron making operations. Two of
these deposits – LabMag and KéMag – were the subject of large-scale
development feasibility studies carried out by the Company and Tata
Steel and published in March 2014.
With these feasibility study results as a
foundation and seven taconite properties now explored to a NI
43-101 compliant resource, the Company optimized its taconite
development strategy through the design of a smaller market entry
initiative called the NuTac Project, for which a NI 43-101
prefeasibility study was carried out and published in June
2016.
In the currently challenging market environment
for new iron ore projects, NML has implemented cash conservation
measures, while protecting its mineral claims and iron ore
development positioning.
For further information, please visit
www.NMLiron.com, www.tatasteelcanada.com and www.tatasteel.com.
Forward-Looking Statements
This news release contains certain forward
looking statements and forward looking information (collectively
referred to herein as “forward looking statements”) within the
meaning of applicable Canadian securities laws. All statements
other than statements of present or historical fact are forward
looking statements. Forward looking information is often, but not
always, identified by the use of words such as “could”, “should”,
“can”, “anticipate”, “expect”, “believe”, “will”, “may”,
“projected”, “sustain”, “continues”, “strategy”, “potential”,
“projects”, “grow”, “take advantage”, “estimate”, “well positioned”
or similar words suggesting future outcomes. In particular,
this news release contains forward looking statements relating to
the Meeting and the management information circular relating
thereto. Although the Company believes that the expectations and
assumptions on which the forward looking statements are based are
reasonable, undue reliance should not be placed on the forward
looking statements because the Company cannot give any assurance
that they will prove correct. Since forward looking
statements address future events and conditions, they involve
inherent assumptions, risks and uncertainties. Actual results
could differ materially from those currently anticipated due to a
number of assumptions, factors and risks.
Management has provided the above summary of
risks and assumptions related to forward looking statements in this
news release in order to provide readers with a more comprehensive
perspective on the Company’s future operations. The Company’s
actual results, performance or achievement could differ materially
from those expressed in, or implied by, these forward looking
statements and, accordingly, no assurance can be given that any of
the events anticipated by the forward looking statements will
transpire or occur, or if any of them do so, what benefits the
Company will derive from them. The forward looking statements
contained herein are expressly qualified in their entirety by this
cautionary statement. The forward looking statements included in
this news release are made as of the date of this news release and
the Company does not undertake and is not obligated to publicly
update such forward looking statements to reflect new information,
subsequent events or otherwise unless so required by applicable
securities laws.
Contact:
Ernest DempseyChief Executive
OfficerTel: (514) 935-3204, X 349