DSO FS Amended Technical Report 22 02 2011 PDF
DSO FS Amended Technical Report 22 02 2011 PDF
DSO FS Amended Technical Report 22 02 2011 PDF
PreparedbythefollowingQualifiedPersons:
DeanJourneaux,ing.,ChiefOperatingOfficer,NML
BishChanda,ing.,SeniorVicePresidentMarketing&Strategy,NML
JeanCharlesBourassa,ing.,VicePresidentMining,NML
MoulayeMelainine,ing.,VicePresidentDevelopment,NML
LaurentPiette,ing.,ProjectManagerDSO,NML
RockGagnon,ing.,Manager,MineralProcessing,NML
andIndependentQualifiedPersons:
AndrBoilard,ing.,SeniorProjectManager,MetChemCanadaInc.
Robertdeltoile,ing.,SGSCanadaInc.
April9,2010
AmendedasofFebruary16,2011
April 2010
Amended as of February 16, 2011
It is to be noted that the Items in this report are numbered in accordance with the Rules
and Policies that govern the contents of an NI 43-101 Technical Report.
The title page being Item 1 and the table of contents being Item 2, the text begins only at
Item 3, the Summary.
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 1
April 2010
Amended as of February 16, 2011
3.0 SUMMARY 6
3.1 Introduction ..................................................................................................................... 6
3.2 Study Results ................................................................................................................. 2
3.3 Geology .......................................................................................................................... 2
3.4 Mining ............................................................................................................................. 3
3.5 Metallurgical Testing ....................................................................................................... 3
3.6 Mineral Processing ......................................................................................................... 5
3.7 Process Plant Site .......................................................................................................... 6
3.8 Transportation ................................................................................................................ 9
3.9 Environment ................................................................................................................... 9
3.10 First Nations ................................................................................................................... 9
3.11 Personnel Fly-in/Fly-out Concept ................................................................................. 10
3.12 Project Execution Plan ................................................................................................. 10
3.12.1 ProjectManagementandOrganization 10
3.12.2 TheIntegratedProjectTeam 11
3.13 Schedule ....................................................................................................................... 11
4.0 INTRODUCTION 14
4.1 General ......................................................................................................................... 14
4.2 Terms of Reference ...................................................................................................... 15
4.3 Units ............................................................................................................................. 18
4.4 Notice ........................................................................................................................... 22
5.0 RELIANCE ON OTHER EXPERTS 23
6.0 PROPERTY DESCRIPTION AND LOCATION 23
6.1 Location ........................................................................................................................ 23
6.2 Property Description and Ownership ............................................................................ 27
6.3 Property Agreements .................................................................................................... 27
6.4 Royalties ....................................................................................................................... 27
6.5 Permitting ..................................................................................................................... 27
6.6 Environmental Issues ................................................................................................... 27
7.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY 28
7.1 Access .......................................................................................................................... 28
7.2 Climate ......................................................................................................................... 28
7.3 Local Resources and Infrastructure .............................................................................. 28
7.4 Physiography ................................................................................................................ 28
7.5 Land use ....................................................................................................................... 29
8.0 HISTORY 30
8.1 General ......................................................................................................................... 30
9.0 GEOLOGICAL SETTING 31
10.0 DEPOSIT TYPES 32
11.0 MINERALIZATION 33
12.0 EXPLORATION 34
12.1 Bulk Sampling ............................................................................................................... 34
12.1.1 2008Program 34
12.1.2 2009Program 35
13.0 DRILLING 36
13.1 Historical Drilling ........................................................................................................... 36
13.2 2008 Program: Reverse Circulation Drilling ................................................................. 36
13.3 2009 Program: Sonic Drilling ........................................................................................ 37
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13.4 Drilling Results .............................................................................................................. 37
13.4.1 DSOArea4 38
13.4.2 DSOArea3 38
13.4.3 DSOArea2 38
14.0 SAMPLING METHOD AND APPROACH 38
15.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY 40
16.0 DATA VERIFICATION 41
16.1 Site Visits ...................................................................................................................... 41
16.2 Integrity of the drill hole databases ............................................................................... 41
16.3 Quality control measures .............................................................................................. 41
16.4 Twin hole analysis ........................................................................................................ 44
17.0 ADJACENT PROPERTIES 45
18.0 MINERAL PROCESSING AND METALLURGICAL TESTING 46
18.1 Process Development Activities ................................................................................... 46
18.1.1 FlowsheetdevelopmentprogramforPrefeasibilityStudy 47
18.1.2 ModificationandimprovementofthePFSflowsheet 47
19.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES 51
19.1 Mineral Resource Estimate .......................................................................................... 51
19.1.1 ResourceBlockModels 51
19.2 Mineral Reserve Estimate ............................................................................................ 54
19.2.1 MiningBlockModels 54
19.2.2 MoistureContent 54
19.2.3 Recovery 54
19.3 Economic Analysis ....................................................................................................... 54
19.3.1 SalesPrice 55
19.3.2 MiningCosts 55
19.3.3 NetValue 55
19.3.4 PitSlopeAngle 55
19.3.5 ResultsoftheAnalyses 55
19.4 Pit Design ..................................................................................................................... 57
19.4.1 DesignParameters 58
19.4.2 DesignSelection 58
19.5 Mine Scheduling ........................................................................................................... 61
19.5.1 ScheduleParameters 61
19.5.2 ProductionSchedule 62
20.0 OTHER RELEVANT DATA AND INFORMATION 64
20.1 Mining ........................................................................................................................... 64
20.1.1 Method 64
20.1.2 Dumps 64
20.1.3 Equipment 64
20.1.4 ProtectionoftheEnvironment 66
20.2 Mineral Processing ....................................................................................................... 66
20.2.1 DesignCriteria 66
20.2.2 ProcessandPlantdescription 67
20.3 Tailings Management ................................................................................................... 72
20.3.1 Siteselection 72
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20.3.2 Designbasis 72
20.4 Infrastructure ................................................................................................................ 72
20.4.1 TimminsSite 72
20.4.2 GoodwoodSite 80
20.5 Electricity ...................................................................................................................... 80
20.5.1 DesignBasis 80
20.6 Other Infrastructure ...................................................................................................... 83
20.6.1 ProductTransportation 83
20.6.2 ProductStorageandShipLoading 87
20.7 Environmental Aspects ................................................................................................. 87
20.7.1 EnvironmentalApprovalRequirementsPhase1 90
20.7.2 BaselineStudiesPhases1and2 93
20.7.3 SummaryofEISsforAG1a 94
20.7.4 FirstNations 99
20.7.5 LocalCommunities 101
20.7.6 DSOPPhase2 101
20.7.7 MethodologicalConsiderations 103
20.7.8 Overview 104
20.8 Project Schedule ........................................................................................................ 104
20.8.1 AdvanceEngineering 104
20.8.2 FullNoticetoProceed 105
20.8.3 KeyMilestoneDates 105
20.8.4 FeasibilityStudy 106
20.8.5 ProductionStartup 106
20.9 Market ......................................................................................................................... 108
20.9.1 Marketing 108
20.9.2 ProductPricing 108
20.9.3 Ironorepricedevelopment 111
20.9.4 LongtermPriceProjection 112
20.10 Capital Cost Estimate ................................................................................................. 113
20.10.1 ScopeofEstimate 113
20.10.2 BasisofEstimate 114
20.10.3 Equipment 116
20.10.4 Mining 118
20.10.5 OffsiteInstallationsandFacilities 119
20.10.6 Indirectcosts 119
20.10.7 SummaryoftheEstimate 119
20.11 Operating Cost Estimate ............................................................................................ 121
20.11.1 SummaryofEstimatedOperatingCosts 121
20.11.2 OperatingSchedules 121
20.11.3 SiteRestorationandMineClosure 123
20.12 Financial Analyses ...................................................................................................... 123
20.12.1 General 123
20.12.2 Revenues 124
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20.12.3 Expenses 124
20.12.4 CapitalExpenditures 124
20.12.5 FiscalConsiderationsandDepreciation 125
20.12.6 ResidualValue 125
20.12.7 Financing 126
20.12.8 Results 126
20.12.9 Sensitivity 126
21.0 INTERPRETATION AND CONCLUSIONS 129
21.1 Interpretation .............................................................................................................. 129
21.2 Conclusions ................................................................................................................ 131
22.0 RECOMMENDATIONS 132
23.0 CERTIFICATES 134
24.0 REFERENCES 143
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Tables
Table 3.1: Summary of Study Results .......................................................................................... 2
Table 3.2: Summary of 43-101 Compliant Resources .................................................................. 2
Table 3.3: Summary of Mineral Reserves ..................................................................................... 3
Table 4.1: NMLs Technical Team .............................................................................................. 17
Table 4.2: Acronyms, abbreviations and symbols ...................................................................... 18
Table 6.1: Potential Targets for Exploration ................................................................................ 24
Table 6.2: DSO Claims and Licenses ......................................................................................... 26
Table 13.1: Summary of the IOCC drill holes per deposit reported ............................................ 36
Table 13.2: 2008 Grouping by Area of the Deposits of the DSO Project .................................... 36
Table 13.3: Summary of DSO Drilling, 2009 ............................................................................... 37
Table 16.1: Results of QA-QC Duplicate Assays Analysis ......................................................... 42
Table 18.1: Results of Pilot Plant Tests on Area 4 Composite ................................................... 49
Table 19.1: Classified Resources by Deposit (combined blue, red and yellow ore types) .......... 53
Table 19.2: Moisture Content ...................................................................................................... 54
Table 19.3: Recovery Values ...................................................................................................... 54
Table 19.4: Mining Cost .............................................................................................................. 55
Table 19.5: Results of Economic Analyses ................................................................................. 57
Table 19.6: Break Even Stripping Ratios .................................................................................... 57
Table 19.7: Mineable reserves by Deposit .................................................................................. 59
Table 19.8: Average MLSA Values ............................................................................................. 61
Table 19.9: PMLSA Values ......................................................................................................... 62
Table 19.10: Summarized Production Schedule (000 tonnes) ................................................... 63
Table 20.1: Truck Requirements ................................................................................................. 65
Table 20.2: Haul distances (One-way) ........................................................................................ 65
Table 20.3: Auxiliary Equipment ................................................................................................. 66
Table 20.4: Basic Process Plant Design Criteria ........................................................................ 67
Table 20.5: Supply and Demand for Electricity (MW) ................................................................. 81
Table 20.6: Subdivision of the DSOP for Purposes of Environmental Impact Assessment ........ 88
Table 20.7: Probable GNL Timeline for Environmental Impact Assessment of AG1a ................ 91
Table 20.8: GC Timeline for Environmental Impact Assessment of AG1a ................................. 92
Table 20.9: Planned and Current Baseline Studies for Phases 1 and 2 ..................................... 93
Table 20.10: Overview of Baseline Data Collected in Summer and Fall of 2009........................ 94
Table 20.11: Cumulative Effects on Socio-economic VECs, DSOP ........................................... 95
Table 20.12: Monitoring Programme, DSOP .............................................................................. 96
Table 20.13: Status of Land-Claims Settlements and Negotiations .......................................... 100
Table 20.14: Tentative KEQC Timeline for Environmental Impact Assessment ....................... 102
Table 20.15: Tentative GC Timeline for Environmental Impact Assessment of AG2a .............. 102
Table 20.16: Tentative GNL Timeline for Environmental Impact Assessment of AG2b ............ 103
Table 20.17: Tentative GC Timeline for Environmental Impact Assessment of AG2b .............. 103
Table 20.18: Major Equipment Delivery Lead Times ................................................................ 105
Table 20.19: Project Milestone Dates ....................................................................................... 105
Table 20.20: Forecast Iron Ore Demand by Source of Demand .............................................. 109
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Table 20.21: Forecast Iron Ore Demand by Type of Ore ......................................................... 109
Table 20.22: Forecast Fines Demand (million tonnes) ............................................................. 110
Table 20.23: Summary of Capital Cost Estimate ...................................................................... 119
Table 20.24: Summary of Production and Operating Costs ..................................................... 121
Table 20.25: Estimated Tonnages and Revenues by Year ...................................................... 124
Table 20.26: Results of Financial Analyses .............................................................................. 126
Table 20.27: Sensitivity of Pre-Tax IRR to Variations in Key Parameters ................................ 127
Figures
Figure 3.1: Location of DSO Deposits, Claims and Principal Infrastructure ................................. 5
Figure 3.2: Block Diagram of Process Flowsheet ......................................................................... 6
Figure 3.3: Timmins Site Overall Layout ....................................................................................... 8
Figure 3.4: Overall DSO Project ................................................................................................. 10
Figure 3.5: Contracting Structure for IPT Approach .................................................................... 11
Figure 3.6: Summary Master Schedule ...................................................................................... 12
Figure 3.7: Timmins Site Overall Layout ..................................................................................... 13
Figure 6.1: Location of DSO Deposits, Claims and Principal Infrastructure ............................... 25
Figure 16.1 Scattergram of QA-QC Fe Pulp Duplicates .......................................................... 43
Figure 16.2 Scattergram of QA-QC SiO2 Pulp Duplicates ...................................................... 43
Figure 16.3 Scattergram of QA-QC Mn Pulp Duplicates ......................................................... 44
Figure 18.1: Block Diagram of Process Flowsheet ..................................................................... 50
Figure 19.1: Timmins 3N Ultimate Pit ......................................................................................... 60
Figure 20.1: Block Diagram of Process Flowsheet ..................................................................... 68
Figure 20.2: Overall Plan View of the Project Sites .................................................................... 69
Figure 20.3: Timmins Site Overall Layout ................................................................................... 70
Figure 20.4: Goodwood Site Overall Layout ............................................................................... 71
Figure 20.5: Existing Interchange at Ross Bay Junction ............................................................ 85
Figure 20.6: Existing Interchange at Arnaud Junction ................................................................ 86
Figure 20.7: DSOP Deposits, by Assessment Group ................................................................. 89
Figure 20.8: Summary Project Schedule .................................................................................. 107
Figure 20.9: Fines Demand Forecast (million tonnes) .............................................................. 111
Figure 20.10 Sensitivity of Pre-tax IRR to Variations in Key Parameters ................................. 128
3.0 SUMMARY
3.1 Introduction
The Direct Shipping Ore (DSO) Project is a brownfield development located in
Canadas historic iron ore producing region of Northern Quebec and Labrador. The Iron
Ore Company of Canada (IOCC) mined and shipped products from various DSO
deposits from 1954 to 1982. Having the basic infrastructure in place, the Project provides
an opportunity to rapidly build a mining operation and start shipping products in late 2011
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to Corus, the European steelmaking unit of the Tata Group, the worlds sixth largest steel
producer,
A Joint Venture Agreement (JVA) exists between NML and Tata Steel Global Minerals
Holdings Pte. Ltd. (Tata) of Singapore, also a member of the Tata Group, and it is
planned that the DSO Project will be developed and operated in accordance with the
terms of the JVA.
This Feasibility Study (the Study) was completed on 25 February, 2010, after twelve
months of intensive work that included ore drilling, metallurgical testing, process
development, in-depth facility design, capital and operating cost estimates and
associated financial analyses. The engineering for the Study was completed in
accordance with acceptable standards.
The Study was submitted for review and approval by the Board of Directors of NML on 18
February, 2010. Having been approved by the Board, it is now being recommended to
Tata in accordance with the terms of the JVA.
3.2 Study Results
The results of the Study are summarized in Table 3.1
Table 3.1: Summary of Study Results
Estimated Initial Capital Cost Can$ 335.1 million
Estimated Sustaining Capital Can$ 124.5 million
Estimated Average Operating Cost Can$ 32.50 per tonne of product
Project IRR
Pre-Tax 29.1%
Post-Tax 22.3%
The estimated cost of equipment leasing and sustaining capital is estimated to be
Can$124.5 million over the life of the project.
3.3 Geology
The DSO deposits were derived from the iron-bearing sediments of the Sokoman
Formation and Ruth Formation. The ores, comprising blue and red hematite with
goethite and limonite, were formed by the leaching of the gangue minerals such as chert,
silicates and carbonates. Of the 22 different deposits that constitute the Project, ten
selected deposits were drilled in 2008 and 2009. Drilling yielded 64.1 million tonnes of
proven and probable reserves. There are 11.75 million tonnes of inferred resources
remaining. In addition, about 40 million tonnes of historical resources (non-NI 43-101
compliant) will be drilled to expand the resource base.
Table 3.2: Summary of 43-101 Compliant Resources
Classification Tonnage Fe(%) Mn(%) SiO
2
(%)
Measured 22,404,000 59.79 0.13 6.03
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Indicated 44,694,000 58.43 0.56 9.27
M+I 67,098,000 58.89 0.69 8.66
Inferred 7,187,000 56.76 0.78 10.14
3.4 Mining
The Study is based on mining ten deposits and blending the ore to provide consistent
feed to the process plant. The current schedule provides a ten-year mine life. The
mining and processing operations will be carried out on a year round basis instead of the
seven-month period envisioned in the PFS. The new schedule will maximize the
utilization of capital assets and optimize operating costs.
The location of the various deposits and the approximate limits of Areas 3 and 4 are
shown in Figure 3.1. Mining will start in Area 3, where IOCC was mining at the time it
closed its operations. Some of the pits are partially mined or stripped and therefore can
be restarted without the expense of stripping.
Mining of Area 4 deposits will start during the second year of full production in order to
achieve the required blend for the plant feed. A 35 km long haul road will be built so that
trucks can bring the ore directly from the pits near the Goodwood Site in Area 4 to the
facilities at the Timmins Site in Area 3. Being a greenfield site, only essential servicing
facilities such as a diesel generator will be built or installed at the Goodwood Site in Area
4.
The mining method selected for the DSO Project is conventional open-pit mining with a
front-end loader/truck operation. The rock will be drilled, blasted and loaded into haul
trucks that will deliver ROM ore to the primary mineral sizer, located at the Timmins Site.
From each pit, waste will be hauled to an out-of-pit waste dump to be located nearby.
Overburden removal and ore and waste mining operations will take place 24 hours per
day, 365 days per year but, for loader and truck calculation purposes, it was assumed
that inclement weather will shut down operations for an average of five days per year.
Table 3.3: Summary of Mineral Reserves
Classification Tonnage Fe(%) Mn(%) SiO
2
(%)
Proven 21,099 59.87 0.130 5.89
Probable 43,011 58.38 0.559 9.26
P+P 64,110 58.87 0.418 8.15
3.5 Metallurgical Testing
An extensive testing program began in 2008 with the objective of developing an optimum
process flowsheet that would achieve the required product grades at acceptable
recovery rates. The tests were performed on bulk surface samples from 10 selected
deposits which were collected from excavated trenches. The deposits were chosen on
the basis of the mine plan to ensure the representativeness of the collected samples of
all three ore types; Blue, Yellow and Red.
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A detailed test program was designed to evaluate the chemical, physical and
metallurgical characteristics of each ore type from different deposits so that a blending
program could be developed to ensure consistent feed quality to the plant. Furthermore,
the test results were used to select and design appropriate process equipment to
upgrade the ore to the required specifications.
The tests were conducted in different independent laboratories in North America, Europe,
South Africa and India as well as in facilities operated by equipment/technology suppliers
experienced in the processing of DSO-type ores.
In summary, the results of the latest pilot plant program on an Area 4 composite were as
shown in Table 3.4.
Table 3.4: Results of Pilot Plant Tests on Area 4 Composite
Sinter Fines Super Fines
Recovery % 63.0 19.0
% Fe 65.9 65.6
% SiO
2
2.90 2.71
% Al
2
O
3
0.35 0.33
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3.6 Mineral Processing
Figure 3.1: Location of DSO Deposits, Claims and Principal Infrastructure
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The run-of-mine ore processing consists of crushing and wet screening to reduce the ore
to - 6 mm size. Gravity separation methods, employing jigs, spirals and hydro-classifiers,
are utilized to upgrade coarse fractions. Materials below 0.1 mm are separated by wet
high intensity magnetic separators (WHIMS).
A block diagram representing the selected flowsheet is presented as Figure 3.2. It
covers the reception of Run-of-Mine ore at the Primary Sizing station to the loading of
Super Fines and Sinter Fines products into railcars for transportation to storage and ship
loading facilities at Pointe-Noire.
Figure 3.2: Block Diagram of Process Flowsheet
ROM Tails(reground)
(6mm) Oversize Concentrate
5 7
Undersize 8
Tail 9
Conc
O/F
13 12 18
Conc Conc
14
Tail 15 19
U/F
16 O/F
Finescreening
(1.0mm)
Spirals
Filtrationof Sinter
Fines
Concentrate
cycloning
(0.1mm)
Tailings
Hydroclassifiers
FiltrationofSuper
Fines
Fine jigs
WHIMS
Crushing&
Scrubbing
Sinter
Fines
Product
Super
Fines
Product
The plant will process 5.0 million natural tonnes per year (mtpy) to produce 4.0 million
dry tonnes of sinter fines and super fines. About 80% of the production will be the higher-
valued sinter fines. Various tests performed on representative bulk samples at
laboratories and facilities operated by experienced technology providers demonstrated
the processing ability to meet product quality requirements.
Tailings from the process plant will be pumped to the nearby mined-out Timmins #2 pit
and the reclaimed water will be pumped back to be used as process water. Hydro power
will be available during summer months from Menihek power station, in an amount yet to
be determined. An electricity transmission line will be re-established from the Hydro-
Quebec (HQ) Schefferville substation to feed the Timmins Site installations. Since
sufficient hydro power will not be available during the winter months, diesel generating
sets will be used to supply all the required power at the Timmins Site.
3.7 Process Plant Site
The Timmins Plant, where the crusher, processing plant, offices, laboratories,
maintenance and service facilities etc. will be located, is near the mined-out Timmins #1
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pit and next to the Railway Loop at the end of a 28 km long rail link that is to be rebuilt on
an old rail bed from the main line at Mile Post (MP) 353 on the TSH main line.
Except for the primary sizing station and product loadout facilities, all other facilities will
be housed under a 106 m wide x 170 m long x 35 m high air-supported dome. In addition
to providing adequate protection from the weather, the dome will be more economical
than having separate buildings for individual facilities. The overall layout of the Timmins
site is shown on Figure 3.3.
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Figure 3.3: Timmins Site Overall Layout
With this project structure, the IPT will be responsible for the scope and execution of the
overall project, with the specific specialized personnel and consultants reporting through
counterparts in the IPT to the IPT Project Manager.
3.12.2 The Integrated Project Team
The NML will establish a team, consisting of its employees or individual consultants who
have been involved in the development of the DSO Project thus far, supplemented by
newly-hired or contracted persons who have experience of the successful realization of
projects of a similar nature.
3.13 Schedule
As soon as the required funds are received from Tata, NML will start detailed
engineering, site camp mobilization and procurement of long-delivery equipment. NML
considers it possible that it will receive a Full Notice to Proceed, issued by Tata, at the
beginning of May, 2010. Based on the above, production is expected to start in mid
October, 2011.
A Summary Master Schedule is presented as Figure 3.6
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Figure 3.6: Summary Master Schedule
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Dollar
Degreeofangle
C
DegreeCelsius
InchEnglishmeasure
% Percentage
m Micron
AECOM AECOMCanadaLtd.
AG AssessmentGroup
Allmineral AllmineralAufbereitungstechnikGmbH.
Aus$ Australiandollar
BF Blastfurnace
BOKELA BOKELAIngenieurgesellschaftfrMechanischeVerfahrenstechnikGmbH
/dmtu UScentsperdrymetrictonneunit
CABO CABODrilling(Ontario)Corp.
CAGR Compoundannualgrowthrate
Can$ Canadiandollar
CEAA CanadianEnvironmentalAssessmentAct
CFA ChemindeFerArnaud
CIF CarriageInsuranceandFreight
CIS CommonwealthofIndependentStates
COMFAR Computermodelforfeasibilityanalysisandreporting
CVRD CompanhiaValedoRioDoce(nowVale)
DEC DepartmentofEnvironmentandConservation
DFO DepartmentofFisheriesandOceans,Canada
DOE DorrOliverEriez
DR Directreduction
DSO Directshippingironore
DSOP DirectShippingIronOreProject
DWT Deadweighttonnage
EIA EnvironmentalImpactAssessment
EIS EnvironmentalImpactStatement
ELAIOM ElrossLakeAreaIronOreMine
EPA EnvironmentalProtectionAct
EPCM Engineering,ProcurementandConstructionManagement
EQA EnvironmentQualityAct
E/RBJ
Interchange
RailwayinterchangetobelocatedbetweenEmerilandRossBayJunction
ESH Environment,SafetyandHealth
Fe Thechemicalsymbolfortheelementiron
FOB Freeonboard
FS FeasibilityStudy
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GC GovernmentofCanada
GDP GrossDomesticProduct
GENIVAR GENIVARSocitenCommandite
Geostat SGS(Geostat)SGSCanadaInc..
GIS GeographicInformationSystem
GNL GovernmentofNewfoundlandandLabrador
GPS Globalpositioningsystem
GQ GovernmentofQubec
GUIF GrayUpperironformation
H Hour
Ha Hectare
HAPSET HealthandPostSecondaryEducationTax
HDPE HighDensityPolyethylene
HNS HollingerNorthShoreExplorationsLtd.
HP Horsepower
HQ HydroQuebec
HVAC Heating,VentilationandAirconditioning
HWCMT HumboldtWedag CoalandMineralTechnologies
IBA Impactsandbenefitsagreement
i.e. thatis
Ing. Memberofthe"OrdredesingnieursduQubec"
IOCC IronOreCompanyofCanada
IPT IntegratedProjectTeam
IRR Internalrateofreturn
ITUM InnuTakuaikanUashatmakManiUtenam
JBNQA JamesBayandNorthernQubecAgreement
JVA JointVentureAgreement
JVC JointVentureCompany
KEQC KativicEnvironmentalQualityCommission
Kg Kilogram
Km Kilometre
kPa Kilopascal
Kt Kilotonne(1,000kg)
kV Kilovolt
kVA Kilovoltamp
kW Kilowatt
kWh Kilowatthour
L Litre
l/s litrespersecond
LBM LesForagesL.B.M.
LC Leanchert
LG3D LerchGrossman3D
LGP LabMagGeneralPartnership
LIF Lowerironformation
LIM LabradorIronMinesLtd.
LME LabradorMiningandExplorationCo.Ltd.
LOI Lossonignition
LRC Lowerredchert
M Metre
m Squaremetre
m Cubicmetre
M Million
MCC Motorcontrolcentre
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MBECMT McNallyBharatEngineering CoalandMineralTechnologies
MDDEP MinistreduDveloppementdurable,delEnvironnementetdesParcs
METSO METSOCorporation
Mg Milligram
MIF Middleironformation
Min Minute
Mintek Mintek,SouthAfrica.
MIMS MediumIntensityMagneticSeparation
MLSA ThesumoftheMnO,LOI,SiO
2
andAl
2
O
3
valuesforanoreblock
Mm Millimetre
Mm Millioncubicmetres
MP353 MilePost353
MRC MidlandResearchCenter
MS Menihekformation(Shale)
Mtpy Milliontonnesperyear
MVA Megavoltampere
MW Megawatt
N North
n.d. nodate
NEQA NortheasternQubecAgreement
NI NationalInstrument
NL NewfoundlandandLabrador
NLH NewfoundlandandLabradorHydro
NIMLJ NationInnuMatimekushLacJohn
Nm Normalcubicmetre
NML NewMillenniumCapitalCorp.
NMLJ NationalMetallurgicalLaboratory Jamshedpur
NNK NaskapiNationofKawawachikamach
NPV Netpresentvalue
NTP NoticetoProceed
NTS NationalTopographicSystem
NW Northwest
PFS Prefeasibilitystudy
PGC Pinkgreychert
PMLSA
ThesumofMnOandLOIvaluespluspredeterminedfixedvaluesforSiO
2
andAl
2
O
3
foranoreblock
PNL ProvinceofNewfoundlandandLabrador
Ppm partspermillion
Project DirectShippingIronOreProject
QA/QC Qualityassurance/Qualitycontrol
QNS&L QubecNorthShoreandLabrador
RBC RotationBiologicalContactor
RF Ruthformation
ROE Returnonequity
ROM Runofmine
Rpm revolutionsperminute
RUIF RedUpperironformation
SCIF SilicateCarbonateironformation
SE Southeast
SGA StudiengesellschaftfrEisenerzAufbereitung
SGS SGSLakefieldResearchLimited
SF SinterFines
SiO
2
Thechemicalformulaforsilica
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 21
April 2010
Amended as of February 16, 2011
SIPA SeptlesPortAuthority
SLon AtypeofWHIMSmanufacturedinChina
SSF SuperFines
T Metrictonne
Tata TataSteelGlobalMineralsHoldingsPteLtd.
Tph Tonnesperhour
Tpy Tonnesperyear
TSH TshiuetinRailTransportationInc.
UCS Uniaxialcompressivestrength
UIF Upperironformation
UNCTAD UnitedNationsConferenceonTradeandDevelopment
UNIDO UnitedNationsIndustrialDevelopmentOrganization
URC Upperredchert
US$ Americandollar
USA UnitedStatesofAmerica
UTM UniversalTransverseMercator
V Volt
VEC ValuedEcosystemComponent
VFD VariableFrequencyDrive
W West
WBS WorkBreakdownStructure
WM WabushMines
Wi Workindex
WHIMS WetHighIntensityMagneticSeparation
YMIF YellowMiddleironformation
Y Year
XRF XRayFluorescence(analyticalmethod)
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 22
April 2010
Amended as of February 16, 2011
4.4 Notice
This document contains the expression of the professional opinion of employees of, and
consultants to, NML (collectively, the Contributors) as to the matters set out herein,
using their professional judgment and reasonable care. It is to be read in the context of
the methodology, procedures and techniques used, any agreements entered into with
NML, their assumptions, and the circumstances and constrains under which the work
was performed. This document is written for the sole and exclusive benefit of NML. The
Contributors disclaim any liability to NML and to third parties in respect of the publication,
reference, quoting, or distribution of this report or any of its contents to and reliance
thereon by any third party. The Qualified Persons who prepared this report do not
assume any responsibility or liability for losses occasioned by any party as a result of the
circulation, publication or reproduction or use of this report contrary to the provisions of
this paragraph. Notwithstanding anything contained in this paragraph each Qualified
Person does not: (a) disclaim responsibility for, or reliance on, that portion of the report
the Qualified Person prepared or supervised the preparation of; or (b) limit the use of
publication of the report in a manner that interferes with NML's obligation to reproduce
the report by filing it on SEDAR.
,
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 23
April 2010
Amended as of February 16, 2011
5.0 RELIANCE ON OTHER EXPERTS
The Feasibility Study and, therefore this technical report, is based in part upon data,
design criteria and information developed by firms acting as consultants to NML and use
was made of reports by
Paul F, Wilkinson & Associates Inc. for all environmental aspects;
Metallurgical testing firms and laboratories:
ALS Chemex (Chemex)
Metso Corporartion (Metso);
Studiengesellschaft fr Eisenerz-Aufbereitung (SGA)
Mintek, South Africa;(Mintek)
Midland Research Center (MRC);
Allmineral Aufbereitungstechnik GmbH.(Allmineral);
Humboldt Wedag Coal and Mineral Technologies (HW-CMT);
Outotec Oyj (Outotec);
Dorr-Oliver Eriez (DOE);
National Metallurgical Laboratory Jamshedpur (NMLJ);
COREM;
McNally Bharat Engineering Coal and Mineral Technologies (MBE-CMT);
BOKELA Ingenieurgesellschaft fr Mechanische Verfahrenstechnik GmbH
(Bokela).
Genivar Socit en Commandite for the work required at the product storage and
ship loading facilities at Pointe-Noire, Quebec;
UMA Engineering Ltd. doing business as AECOM, for all aspects relating to the
transportation of ore in railcars between the Timmins Site and the product storage
and ship loading facilities at Pointe-Noire, Quebec
Ferrum Consultants, for a market analysis that formed the basis for the estimation
of DSO product prices;
The authors of each of the above-listed reports are responsible for the contents thereof.
6.0 PROPERTY DESCRIPTION AND LOCATION
6.1 Location
The 22 deposits of the DSO project (the Property) are situated to the northwest and
southeast of the Town of Schefferville, along an imaginary NW-SE line, and some are on
the Quebec side and some are on the Labrador side of the provincial border. By
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 24
April 2010
Amended as of February 16, 2011
reference to the National Topographic System (NTS), they are in the regions 23J/10,
23J/14, 23J/15 and 23O/03, as shown in Table 6.1.
The locations of the deposits and claims are shown on Figure 6.1 and details of the DSO
claims in Qubec and licenses in Newfoundland and Labrador are set out in Table 6.2
Table 6.1: Grouping by Area of the Deposits of the DSO Project
AREASDSO2&3 AREADSO4
(23J/15) (23J/14) Goodwood
StarCreek2 Fleming7N Kivivic
Ferriman4 Fleming7X Sunny1
Fleming6 Timmins3N Leroy1
Timmins4
Timmins7
Timmins8
Barney1
Barney2
Sawmill
Timmins3S
In addition to the abovelisted deposits, NML has identified as potential targets for
exploration some other deposits in Qubec and in Newfoundland and Labrador, listed in
Table 6.1 for which no historical resource estimates are available:
Table 6.1: Potential Targets for Exploration
AreaDSO3 SnowLake1
AreaDSO3 SnowLake2
AreaDSO3 Elross2
AreaDSO3 Aurora
AreaDSO4 Sunny2
16.4 Twin hole analysis
The amount of historical drilling is important in the DSO project. The objective of the twin
hole analysis is to validate with modern drilling, the historical information, by comparing a
set of two holes considered close to each other. The twin holes analyzed here are not
twins in the strictest sense since the historical holes could not be located in the field.
However, we have identified pairs of holes that had their recorded location within a few
meters from one another and considered them as twins.
Three pairs of twin holes could be identified in the Goodwood deposit. Goodwood is the
biggest deposit of the eight under study, with approximately 50% of the mineral
resources. In order to properly compare assay values, the drill holes were composited
into 3m long bench composites. This operation segments the drill holes horizontally so
that the composites in each hole perfectly line up. Finally only the composites present at
the same elevation in both holes were kept for analysis. The present twin hole analysis
has its limitations since there exists very little information on the sample preparation and
assaying of the old IOCC holes. It is known that Fe, SiO2 and Mn were assayed using
wet chemistry methods for the IOCC holes and the modern samples were assayed by
XRF.
SGS Geostat observed that in each pair, the NML hole has a Fe grade slightly lower
than its IOCC counterpart and conversely a SiO2 grade slightly higher than its IOCC
counterpart. From the global appreciation and analysis, SGS Geostat considers that the
IOCC holes are adequately validated by the NML twins and that the IOCC holes can be
incorporated into the mineral resource estimation. The details of the twin hole analysis in
each pair of holes could be found on Sedar in the SGS Geostat report.
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 45
April 2010
Amended as of February 16, 2011
17.0 ADJACENT PROPERTIES
Adjacent to the properties owned by NML in Labrador and Quebec are other former
operations of IOCC that were either mined out or abandoned by IOCC in 1982. Some of
these properties in Labrador are currently owned by Labrador Iron Mines Ltd.
The previously owned IOCC operations in Quebec have reverted to the ownership of
Hollinger, however, NML owns some of the properties with deposits.
IOCC is currently operating the Carol Lake iron ore property, 200 km south of
Schefferville near Labrador City, Labrador. NML holds an 80% interest in the LabMag
iron ore deposit located in Newfoundland and Labrador, approximately 30 km northwest
of Schefferville and a 100% interest in the KMag iron ore deposit located in the
province of Qubec, approximately 50 km north of Schefferville. Positive PFS were
completed for these deposits in 2006 and 2009 respectively. Reserves have been
estimated at 3,545 Mt for LabMag and 2,141 Mt for KMag.
Labrador Iron Mines Ltd is also carrying out development work for processing and
shipping of Direct Shipping Ore from deposits in the Schefferville area that were
previously mined by IOCC. The current iron ore mining areas at Wabush, Labrador City
and Mount-Wright are within 250 km of the DSO Property.
Bedford Resource Partners (Bedford) staked 99 claims in north central Qubec, 160 km
north of Schefferville in the spring of 2005. The claims cover the Lac Otelnuk iron ore
deposit, comprised of meta-taconite.
Other iron ore projects are under investigation by Adriana Resources and Champion
Minerals.
Metco Resources Inc. announced in 2004 a planned exploration program for gold and
polymetallic massive sulphides on Lac La Touche and Lac Gauthier properties some 50
km east-northeast of Schefferville.
Virginia Gold Mines Inc. is exploring for gold, uranium, nickel and platinum group metals
on properties 275 km northwest of Schefferville.
Various private prospectors also own claims near the Goodwood area where exploration
for manganese is being conducted.
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 46
April 2010
Amended as of February 16, 2011
18.0 MINERAL PROCESSING AND METALLURGICAL TESTING
18.1 Process Development Activities
The DSO testing program began in 2008 with the objective of developing an optimum
process flowsheet that would achieve the required product grades at acceptable
recovery rates. The tests were performed on bulk surface samples from 10 selected
deposits which were collected from excavated trenches. The deposits were chosen on
the basis of the mine plan to ensure representativeness of the collected samples which
represented all three ore types; Blue, Yellow and Red. Tests were designed to determine
their individual metallurgical characteristics and 10 to 11 tonnes of each type were
collected for testing purposes.
A detailed test program was designed to evaluate chemical, physical and metallurgical
characteristics of each ore type from different deposits so that a blending program could
be developed to ensure consistent feed quality to the plant. The test results were used to
select and design appropriate process equipment to upgrade the ore to the required
specifications. Adequate quantities of sample were processed using selected flowsheet
options for metallurgical evaluation by the customer.
The tests were conducted in different independent laboratories as well as facilities
operated by equipment/technology suppliers. There has been little testing to upgrade
DSO type ores in Canada and their liberation characteristics are not well documented.
NML undertook comprehensive studies to develop a basic understanding of the
behaviour of the ore during processing and to select beneficiation equipment to
efficiently upgrade it to the required product grades. Results of the metallurgical test
work, including reports from independent laboratories and equipment suppliers, were
provided to NML.
The process plant design was developed in different stages as follows:
Initial exploratory tests leading to flowsheet finalization for the Pre-feasibility Study.
The Pre-feasibility Study flowsheet was based on production of a Lump Ore and
Sinter Fines with the plant operating seven months per year.
Modifications and improvements to the flowsheet were based on additional test
data and process modelling.
After review, the modifications and improvements led to the finalization of criteria
and a testing program to enable the Feasibility Study to be completed. Products
changed to Sinter Fines and Super Fines with the plant operating on a year-round
basis.
A confirmation test on the Area 4 composite in a pilot plant and auxiliary tests for
equipment design was undertaken to finalize the process design.
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 47
April 2010
Amended as of February 16, 2011
18.1.1 Flowsheet development program for Pre-feasibility Study
The steps taken to explore processing options leading to the selection of a flowsheet for
the Pre-feasibility Study were as follows:
Collection of bulk sample:
Trenches were excavated in ten selected deposits. About 200 tonnes of samples
were hauled from each pit to a processing area.
Determination of hardness and abrasiveness:
Certain samples were hand-picked for hardness and abrasiveness tests which were
performed by the suppliers of crushing equipment to establish design parameters.
Bulk sample crushing and dry screening:
Samples were crushed and dry screened at 32 mm on site to collect 10 tonnes from
each for shipment and further processing in different labs.
Bench scale testing on composite blends for exploratory process development:
Four composite samples of Red, Yellow and Blue ores were prepared to explore a
variety of beneficiation processes. Since over 75% of the resources consist of Blue
ores, two Blue composites from two different areas were prepared. These samples
were tested at Mintek in South Africa and SGA in Germany.
Blending, washing and wet screening of bulk samples:
11 bulk samples were shipped in drums to Midland Research Centre (MRC) in
Minnesota. After characterization of each sample, 1 Yellow, 1 Red and 2 Blue
samples were selected for washing and screening into three fractions.
Pilot scale testing of equipment/processes by suppliers to assist in development of
the upgrading flowsheet:
Washed and screened samples were tested in different pilot scale equipment
supplied by Allmineral in Germany. After various tests, they proposed a preliminary
process plant flowsheet for the pre-feasibility study.
18.1.2 Modification and improvement of the PFS flowsheet
The following steps led to modification and improvement of the PFS flowsheet.
Beneficiation process for the fines:
Based on the results of the exploratory tests at SGA and Mintek, samples of the -
1 mm fraction were provided to Outotec in the USA to test its separation equipment
in order to develop a concentrating process for the ore.
Pilot plant tests for the Feasibility Study
Based on Outotecs studies, a flowsheet consisting of a combined gravity and
magnetic separation circuit to upgrade the -1 mm fraction was proposed, It was
decided that a 1 tonne bulk sample be sent to the National Metallurgical Laboratory
in Jamshedpur (NMLJ), India, for further optimization studies regarding the
upgrading of -1 mm fractions.
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 48
April 2010
Amended as of February 16, 2011
During the meeting, the following decisions were made regarding the finalization of the
process flowsheet for the Feasibility Study:
The mine, process plant and ore transportation will be operated on a year-round
basis.
Two full-scale pilot plant tests will be undertaken to finalize the process flowsheet,
establish plant material balances and size the process equipment.
The first test will have a composite feed made up of a 50-50 blend of Red and Blue
ores from Area 3. The available 2008 bulk sample will be used for the test.
The second test will process a representative blend of Area 4 ores. In order to test
ores from deposits that were not sampled in 2008, new samples will be collected
from three deposits, namely Goodwood, Kivivic 4 and Sunny 1 to prepare the
composite from Blue and Yellow ores.
A pilot plant flowsheet will be selected after NMLJ has completed its optimization
tests.
Sufficient quantities of product sample will be produced for metallurgical tests by
the customer.
No lump will be produced because of the ores friability and concern for
degradation during transportation. The project will mainly aim to produce sinter
fines but due to the fineness of the ore, some super fines will also be produced.
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 49
April 2010
Amended as of February 16, 2011
Activities related to finalizing the process flowsheet for the Feasibility Study were as
follows:
Pilot plant testing of Area 3 composite.
Material from the 2008 bulk sample was prepared at MRC by crushing, washing and
screening. The products were shipped to Germany, to MB-CMT for jig processing
and to SGA for -1 mm processing and for testing at the pilot scale.Results
demonstrated that a minimum of 64.5% Fe in both sinter fines and super fines
products could be achieved and the combined assay of SiO
2
and Al
2
O
3
was less than
4.5%.
Pilot plant testing of Area 4 composite:
During the summer of 2009, new bulk samples were collected by using a sonic drill
to prepare an Area 4 composite. Samples were sent in drums to COREM in Quebec
City to prepare a composite. Individual samples from three deposits were crushed,
homogenized and proportionately blended to prepare a representative sample of
Area 4 plant feed. The composite was washed, screened and sent to MB-CMT and
SGA in Germany for testing.
The Area 4 composite was found to contain an excessive amount of fines. Over 80% of
the sonic bulk sample was less than 1 mm in size when the 2008 trench sample
contained only between 50 and 60% fines. This was found to be caused by vibration and
disturbance created by sonic drilling;
18.1.3 FinalizationoftheProcessPlantdesign
Confirmation pilot plant tests on Area 4 composite:
Area 4 contains 85% of the total DSO resources. It is therefore important to have proper
design data based on a pilot plant test with representative samples in order to finalize
the detailed design and confirm equipment sizing. A decision was made to conduct a
new pilot plant test with a blend of 2008 trench samples. COREM made a new
composite comprised of samples from the Goodwood deposit, blended to produce a
representative feed for the process plant and the material was sent to Germany, to MB-
CMT for jig processing and to SGA for -1 mm processing. The tests have been
completed and the evaluation of results shows that the selected flowsheet will achieve
the targeted product grade. Based on the material balance, plant recovery has exceeded
80%.
The recoveries and product grades obtained during the various tests were as shown in
Table 18.1.
Table 18.1: Results of Pilot Plant Tests on Area 4 Composite
Sinter Fines Super Fines
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 50
April 2010
Amended as of February 16, 2011
Recovery % 63.0 19.0
% Fe 65.9 65.6
% SiO
2
2.90 2.71
% Al
2
O
3
0.35 0.33
A block diagram representing the selected flowsheet is presented as Figure 18.1
Figure 18.1: Block Diagram of Process Flowsheet
ROM Tails(reground)
(6mm) Oversize Concentrate
5 7
Undersize 8
Tail 9
Conc
O/F
13 12 18
Conc Conc
14
Tail 15 19
U/F
16 O/F
Finescreening
(1.0mm)
Spirals
Filtrationof Sinter
Fines
Concentrate
cycloning
(0.1mm)
Tailings
Hydroclassifiers
FiltrationofSuper
Fines
Fine jigs
WHIMS
Crushing&
Scrubbing
Sinter
Fines
Product
Super
Fines
Product
The cost to mine each block was calculated and stored in the mining model as
MCOST.
19.3.3 Net Value
The net value (profit) of each block was calculated and stored in the mining model as
NET.
19.3.4 Pit Slope Angle
The maximum pit slope angle used for the economic analysis was 50. This value was
obtained from historical data from mined-out pits in the Timmins area.
19.3.5 Results of the Analyses
The resource contained in each deposits economic shell was calculated and is
presented in Table 19.5.
Deposit
Net Ore Cost
(Can$/tonne)
Waste Cost
(Can$/tonne)
Timmins3N 18.77 2.25
Timmins4 18.96 2.16
Timmins7 18.78 2.21
Fleming7N 17.45 2.23
Ferriman4 18.50 2.28
Goodwood 22.06 2.32
Kivivic3N 21.25 2.25
Kivivic4 21.21 2.25
Kivivic5 21.51 2.25
Sunny1 21.28 2.25
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 56
April 2010
Amended as of February 16, 2011
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 57
April 2010
Amended as of February 16, 2011
Table 19.5: Results of Economic Analyses
Deposit
Ore
(kt)
Waste
(kt)
Strip
Ratio
(W/O)
Revenue
(M$)
Cost
(M$)
Net
Value
(M$)
Resource
Recovery
(%)
Timmins3N
2,062 4,660 2.26 97 49 48 96.0
Timmins4
2,090 888 0.42 99 42 58 98.1
Timmins7
911 558 0.61 43 18 25 97.4
Fleming7N
6,423 5,494 0.86 268 124 144 98.3
Ferriman4
9,136 15,659 1.71 367 205 162 97.6
Goodwood
30,595 10,793 0.35 1,405 700 705 99.0
Kivivic3N
1,714 1,871 1.09 81 41 41 95.1
Kivivic4
7,408 7,395 1.00 346 174 172 98.2
Kivivic5
2,157 1,046 0.48 101 49 53 98.2
Sunny1
3,475 483 0.14 165 75 90 97.7
TOTAL
65,971 59,846 0.91 3,243 1,631 1,612 98.3
The low cost and high selling price combined with very continuous ore bodies leads to a
very high resource recovery of 98.3% (Economic Resource/Geological Resource).
The break-even stripping ratio has been calculated for each deposit. This value refers to
the maximum amount of waste that can be mined for the deposit to have a profit margin
of 10%. The break-even stripping ratio is calculated by equating the revenue minus 10%
to the mining and processing costs.
Table 19.6 shows the break-even stripping ratio for each deposit.
Table 19.6: Break Even Stripping Ratios
Deposit
Stripping Ratio
(Waste/Ore)
Timmins3N 10.4
Timmins4 11.0
Timmins7 10.8
Fleming7N 9.0
Ferriman4 7.7
Goodwood 8.3
Kivivic3N 9.5
Kivivic4 9.3
Kivivic5 9.2
Sunny1 9.5
As the costs and prices used in this economic pit optimization are more conservative
than the final values developed in the Feasibility Study, it was not considered necessary
to run any sensitivity on the input parameters for the pit design.
19.4 Pit Design
Engineered pits were designed for each deposit based on the economic pit shells.
Drawings were prepared showing the pits at end of each year of development and the
ultimate pits. As an example, Figure 19.1 shows the ultimate pit and associated waste
dump for Timmins 3N.
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 58
April 2010
Amended as of February 16, 2011
19.4.1 Design Parameters
The following parameters were used in the engineered pit designs:
Bench Height: 12m (Timmins, Fleming, Kivivic, Sunny), 10m (Goodwood)
Ramp Width: 21m
Ramp Grade: 8% maximum
Minimum Working Area: 30m
Face Angle: 70
Overall Pit Slope: 50
Catch Bench Width: 5.7m (Timmins, Fleming, Kivivic, Sunny), 9.5m (Goodwood)
One catch bench per bench (Timmins), one catch bench per two benches
(Goodwood)
In all deposits, the pit ramp did not extend down to the pit bottom. It was assumed that a
backhoe will mine the lowest bench, thereby reducing the waste volume required to be
extracted.
The block models incorporated some internal waste as dilution during the 6 m block
compositing process where sub-economic assay intersections were used in block grade
interpolation. Therefore, no additional dilution factor was applied in the reserve estimate
19.4.2 Design Selection
Several pit designs were made for each deposit and were compared on a net value
basis, those with the highest values being selected to arrive at the mineable reserve.
Although Timmins 3N has a relatively high stripping ratio of 3.80, the pit selected
generates the highest net value of Can$ 38.5 Million. A pit was designed with a stripping
ratio of 2.65, resulting in a net value of Can$ 36.3 Million.
Table 19.7 summarizes the mineable reserves by deposit.
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 59
April 2010
Amended as of February 16, 2011
Table 19.7: Mineable reserves by Deposit
Deposit
Proven
Ore(kt)
Probable
Ore(kt)
TotalOre
Mined(kt)
Waste
(kt)
Strip
Ratio
Fe
(%)
Resource
Recovery
(%)
Revenue
(M$/t)
Cost
(M$/t)
Net
Value
(M$/t)
Timmins3N 0 1,969 1,969 7,474 3.80 59.8 91.7 92 54 39
Timmins4 0 2,006 2,006 1,863 0.93 60.6 94.1 95 42 53
Timmins7 0 868 868 859 0.99 58.4 92.8 41 18 23
Fleming7N 0 6,325 6,325 7,943 1.26 61.0 96.8 264 128 136
Ferriman4 0 9,075 9,075 22,913 2.52 55.4 96.9 364 220 144
Goodwood 21,099 7,984 29,083 14,918 0.51 59.2 25.8 1,336 676 660
Kivivic3N 0 1,696 1,696 4,531 2.67 60.7 94.1 80 46 34
Kivivic4 0 7,466 7,466 13,877 1.86 58.3 99.0 349 190 159
Kivivic5 0 2,115 2,115 2,423 1.15 62.3 96.3 99 51 48
Sunny1
0 3,507 3,507 2,734
0.78
58.9 98.6
166 81
86
TOTAL 21,099 43,011 64,110 79,535 1.24 58.9 95.5 2,888 1,506 1,382
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 60
April 2010
Amended as of February 16, 2011
Figure 19.1: Timmins 3N Ultimate Pit
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Total
Waste 1,094,3 5,549.9 5,44408 6,190.7 7,830.4 6,248.4 6,606.5 4,329.1 3,917.6 5,591.2 3,821.6 56,6250
Timmins 3N 0 0 0 0 0 0 2,132.4 0 575.7 3,158.4 1,60.4 7,474.0
Timmins 4 0 0 0 506.0 611.8 185.1 560.6 0 0 0 0 1,863.5
Timmins 7 0 859.2 0 0 0 0 0 0 0 0 0 859.2
Fleming 7N 1,094.3 4,690.7 2,157.8 0 0 0 0 0 0 0 0 7,942.8
Goodwood 0 0 3,287,0 1,281.3 316.0 1,716.5 1,266.5 1,280.3 1,123.9 2,432.8 2,214.2 14,918.5
Kivi vic 3N 0 0 0 1,042.9 2,767.4 720.8 0 0 0 0 0 4,532.0
Kivi vic 4 0 0 0 2,1251 3,351.4 2,812.8 2,198.9 1,597.6 1,792.4 0 0 13,878.2
Kivi vic 5 0 0 0 0 558,.7 758.1 360.0 746.5 0 0 0 2,423.0
Sunny 1 0 0 0 1,235.5 225.3 55.0 88.3 704.6 425.6 0 0 2,734.4
Run of Mine
Ore
161.2 4,530.1 5,831.8 5,578.4 5,480.5 5,607.0 5,518.6 5,585.9 5,562.9 5,642.6 5,535.3 55,034.5
Timmins 3N 0 0 0 0 0 0 .8 0 18.3 959.6 990.8 1,969.5
Timmins 4 0 0 0 259.0 416.6 435.4 894.8 0 0 0 0 2,005.7
Timmins 7 0 868.1 0 0 0 0 0 0 0 0 0 8681
Fleming 7N 161.2 3,662.0 2,501.9 0 0 0 0 0 0 0 0 6,325.0
Goodwood 0 0 3,330.0 3,403.2 2,884.7 2,402.8 2,717.4 2,470.9 2,646.8 4,683.0 4,544.5 29,083.3
Kivi vic 3N 0 0 0 264.3 757.8 673.7 0 0 0 0 0 1,695.7
Kivi vic 4 0 0 0 141.4 979.1 1,435.6 1,328.2 1,149.0 2,432.3 0 0 7,465.6
Kivi vic 5 0 0 0 0 226.4 652.4 303.6 932,3 0 0 0 2,114.6
Sunny 1 0 0 0 1,510.6 216.0 7.1 274.0 1,033.7 465.6 0 0 3,506.9
Total
Production
1,255.5 10,080.0 11,276.6
11,769.
1
13,310.9 11,855.4 12,125.2 9,914,9 9,480.6 11,233.8 9,356.9
111,658.
9
Timmins 3N 0 0 0 0 0 0 2,133.2 0 593.9 4,118.1 2,598.2 9,443.5
Timmins 4 0 0 0 765.0 1,028.4 620.5 1,455.3 0 0 0 0 3,869.2
Timmins 7 0 1,727.3 0 0 0 0 0 0 0 0 0 1,727.3
Fleming 7N 1,255,5 8,352.7 4,659,7 0 0 0 0 0 0 0 0 14,267.9
Goodwood 0 0 6,616.9 4,684.5 3,200.7 4,119.3 3,983.9 3,751.2 3,770.7 7,115.7 6,758.7 44,001.8
Kivi vic 3N 0 0 0 1,307.1 3,525,2 1,394.6 0 0 0 0 0 6,226.7
Kivi vic 4 0 0 0 2,266.4 4,330.6 4,248.5 3,526.9 2,746.6 4,224.7 0 0 21,343.7
Kivi vic 5 0 0 0 0 784.8 1,410.5 663.5 1,678.8 0 0 0 4,537.7
Sunny 1 0 0 0 2,746.1 441.3 62.1 362.2 1,738.3 891.2 0 0 6,241.2
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 64
April 2010
Amended as of February 16, 2011
20.0 OTHER RELEVANT DATA AND INFORMATION
20.1 Mining
20.1.1 Method
The mining method selected for the DSO Project is conventional open-pit mining with a
front-end loader/truck operation. The rock will be drilled, blasted and loaded into haul
trucks that will deliver ROM ore to the primary mineral sizer, located at the Timmins Site.
From each pit, waste will be hauled to an out-of-pit waste dump to be located nearby.
Overburden removal and ore and waste mining operations will take place 24 hours per
day, 365 days per year but, for loader and truck calculation purposes, it was assumed
that operations will shut down for an average of five days per year due to inclement
weather.
The mining work schedule was established as two twelve-hour shifts per day, seven
days per week and the turnaround was established as two weeks in, two weeks out.
20.1.2 Dumps
Dumps that will serve as storage for material that is currently considered to be sub-
economical will be located at various points between the pits, in non-mineralized areas
to be defined based on the results of condemnation drilling yet to be carried out.
Waste dumps were designed for each deposit to accommodate the quantity of waste
that will be removed, taking into account the fact that waste rock will be used for the
construction of haul roads and, initially, the access road. The waste dumps will be
progressively rehabilitated.
The following parameters were used in the waste dump designs:
Lift Height: 12 m (Timmins area), 10m (Goodwood area);
Lift Slope: 45;
Berm Width: 12m (Timmins area), 10m (Goodwood area);
One berm per lift;
Overall Dump Slope: 26.5;
Swell Factor: 1.25;
Minimum Dump Footprint Offset:
Pit Crest: 100m;
Railroad : 100m;
Provincial Border: 50m;
Haul Road: 50m;
NML Claim Border: 50m;
The positions and sizes of the planned dumps were shown on the ultimate mine plan for
each pit, an example of which was presented as Figure 19.1
20.1.3 Equipment
The various pieces of equipment required to achieve the mine plan are addressed
hereafter.
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 65
April 2010
Amended as of February 16, 2011
Drilling and Blasting
Both ore and waste will be drilled using a rotary drill to produce 9 (250 mm) diameter
holes on patterns of 8.5 m 7.5 m. for ore and 9 m 8 m for waste. Drilling will generally
be done on a 12 m bench height with 1.5 m sub-drilling to minimize high spots on the
bench floor between holes, but at Goodwood, the bench height will be 10 m.
Blasting will be executed under contract with an explosives supplier that will not only
store and provide all the blasting materials and technology required by the mine but will
also provide a down-the-hole service, i.e. the supplier will deliver the required amount of
explosive into each blast hole under the supervision of NMLs blaster and according to
the blast design of NMLs engineer. Because of the large volume of explosives required
and the remote nature of the operation, a bulk explosives plant will be constructed in the
vicinity of, but not on, the mine sites. Emulsion will be used for blasting and preliminary
blasting simulation and fragmentation analysis indicates that an average powder factor
of 0.2 kg/t for ore and 0.18 kg/t for waste will achieve a fragmentation which is suitable
for the size of front-end loaders selected for the DSO mining operation.
Haul Trucks
The haul truck to be used for the DSO project was selected on the basis of its suitability
to economically and safely haul 135-tonne loads from the pits in DSO Area 04 to the
Primary Crushing Station in DSO Area 03.
Table 20.1 summarizes the number of trucks required to complete the detailed mine plan
and Table 20.2 summarizes the annual haul distances for ore and waste.
Table 20.1: Truck Requirements
Year 1 2 3 4 5 6 7 8 9 10 11
Number 2 3 8 10 10 10 10 10 10 10 10
Table 20.2: Haul distances (One-way)
Year 1 2 3 4 5 6 7 8 9 10 11
Waste Km 1.0 1.5 2.1 1.5 1.7 2.1 2.0 2.4 2.6 2.2 2.6
Ore Km 3.4 3.8 19.4 26.9 26.5 26.2 24.6 28.0 28.3 26.4 26.4
Total Km 1.3 2.6 11.0 13.6 11.9 13.5 12.2 16.8 17.7 14.4 16.7
Loaders
The loader selected for the DSO project is the CAT 993K or equivalent. This loader was
selected on the basis of experience in the operation of similar pits under similar
conditions. Further study will be made to determine whether this loader is the best match
for the HaulMax 3900T. T
Production Drills
The production drill selected for the DSO project is capable of drilling a 9 (250
mm).diameter hole through a bench height of 12 m. Selection was made on the basis of
experience in the operation of similar pits under similar conditions.
Auxiliary Equipment
The auxiliary equipment required for the maintenance of haul roads, the building of the
access road and the creation of waste dumps, for bench preparation and for levelling
before drilling is listed in Table 20.3 together with a selection of maintenance and other
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 66
April 2010
Amended as of February 16, 2011
equipment including cranes and specialized service trucks, as well as equipment for use
in the Process Plant.
Wherever practical, to minimize spares, mobile equipment to service the Process Plant,
camp and other installations will be standardized with that specified for the mines.
Table 20.3: Auxiliary Equipment
Unit Number Unit Number
TrackedDozer(CATD8T) 3 MobileCrane80tonneHydraulic 1
Grader(CAT16M) 2 MobileCrane30tonneAllterrain 1
WaterTankerTruck(Inter700series) 1 BoomTruck 1
SandTruck 1 AirtrackDrillandCompressor 1
Combo(CAT450E) 1 Flatbed 1
FuelTankerTruck 1 Firetruck(powder) 1
LubeTruck 1 Pump 10
WeldingTruck 1 Mobilelighttower 5
TireHandler 1 Mineradio 35
Bus(40passenger) 1 SnowploughTruck 2
Bus(24passenger) 1 FrontendLoader 1
PickupTruck 10 Forklift(Propanepowered) 2
20.1.4 Protection of the Environment
Mine operations will comply with all applicable Canadian and provincial environmental
guidelines, regulations and laws. Health and safety rules and regulations will be strictly
enforced.
Equipment will be selected so that noise emission will not be greater than 85 dbA at a
horizontal distance of one metre and waste dumps will be designed to have gentle
slopes so as to avoid erosion as much as possible and facilitate revegetation.
Environmental impact mitigation measures are addressed in detail in Appendix 5 to the
EIS.
20.2 Mineral Processing
20.2.1 Design Criteria
The Process Plant capacity was established for the production of four 4 million dry
tonnes per year of Sinter Fines and Super Fines products. Operations will start in Phase
1 with mining in Area 3, which is a brownfield area where some preparation for mining
has already taken place and some infrastructure already exists. In Phase 2, operations
will move to the north to mine deposits in Area 4, which is a greenfield area requiring
more preparation. The composition of the feed mix that will be sent to the Process Plant
will be different for each phase but the Process Plant was designed to accommodate
both types of mix, although the mines will need to correctly blend the various ore types to
minimize variations in the characteristics of the feed delivered to the Process Plant. To
prevent freezing of the products in railcars during cold weather, the plant will have the
capability of steam filtering as well as drying, to sufficiently reduce the product moisture
during transportation. Basic plant design criteria for both phases are shown in Table
20.4. Plant availability is consistent with North American standards for the type of
equipment to be used and spare equipment, where appropriate, will be held on site to
ensure maximum plant availability.
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 67
April 2010
Amended as of February 16, 2011
Table 20.4: Basic Process Plant Design Criteria
Parameter Phase 1 Phase 2
SizingStationcapacity
Oreprocessingrate(t/y)natural 5,000,000 5,000,000
Oreprocessingrate(t/d) 13,699 13,699
Oreprocessingrate(t/h) 634 634
Operatingtime(%) 90 90
ProcessingPlantCapacity
Oreprocessingrate(t/y) 5,000,000 5,000,000
Oreprocessingrate(t/d) 13,699 13,699
Oreprocessingrate(t/h) 634 634
Operatingtime(%) 90 90
Weightrecovery(%) 75 80
Totalproducts(t/y)dry 3,750,000 4,000,000
Products
SinterFines(t/y) 3,000,000 3,200,000
SinterFines(t/d) 8,219 8,767
SinterFinesproportion 80 80
SuperFines(t/y) 750,000 800,000
SuperFines(t/d) 2,055 2,192
SuperFinesproportion(%) 20 20
20.2.2 Process and Plant description
A simplified flowsheet is presented as Figure 20.1 an overall plan view of the Project
Sites is presented as Figure 20.2 and plan views of the Timmins and Goodwood Sites
are presented as Figures 20.3 and 20.4 respectively
.
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 68
April 2010
Amended as of February 16, 2011
Figure 20.1: Block Diagram of Process Flowsheet
ROM Tails(reground)
(6mm) Oversize Concentrate
5 7
Undersize 8
Tail 9
Conc
O/F
13 12 18
Conc Conc
14
Tail 15 19
U/F
16 O/F
Finescreening
(1.0mm)
Spirals
Filtrationof Sinter
Fines
Concentrate
cycloning
(0.1mm)
Tailings
Hydroclassifiers
FiltrationofSuper
Fines
Fine jigs
WHIMS
Crushing&
Scrubbing
Sinter
Fines
Product
Super
Fines
Product
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 69
April 2010
Amended as of February 16, 2011
Figure 20.2: Overall Plan View of the Project Sites
New Millennium Capital Corp.
Technical Report Feasibility of the DSO Project Page 70
April 2010
Amended as of February 16, 2011
Figure 20.3: Timmins Site Overall Layout
April 2010
Amended as of February 16, 2011
Figure 20.4: Goodwood Site Overall Layout
DSO2,DSO3andDSO4
Qubec andLabradorbasedvariantsofDSO3DSO4haulroad
Hydrology
DSO2,DSO3andDSO4
Hydrogeology DSO2,DSO3andDSO4
Avifauna QubecbasedvariantofDSO3DSO4corridor
TerrestrialEcosystem
Mapping
QubecbasedvariantofDSO3DSO4corridor
20.7.3 Summary of EISs for AG1a
Two EISs for AG1a were submitted in December, 2009, one to the GNL and one to the
GC.
EIS for AG1a Submitted to the GNL
Predicted Biophysical Effects
Fourteen biophysical environmental components were reviewed, and 11 Valued
Ecosystem Components (VECs) were selected on the basis of the GNL Guidelines, a
thorough programme of public information/consultation, a literature review and
professional judgment.
The residual effects were predicted using the following criteria: nature; direction; spatial
extent; duration; frequency; magnitude; level of certainty; reversibility; ecological value;
and socio-economic value. All of the effects on biophysical VECs are negative, but none
of them is predicted to be significant.
The only cumulative biophysical effect that could be measured was that on air quality in
Schefferville in combination with the effects of Labrador Iron Mines Limiteds (LIM)
Schefferville Area Iron Ore Mine. None of the measured effects exceeded approximately
20% of the applicable regulatory standard.
The potential for a negative cumulative effect on sedentary caribou was considered to be
very small.
Predicted Socio-economic Effects
Thirty-three socio-economic VECs were selected in a manner similar to that described
above for the biophysical VECs. The only significant residual socio-economic effect is a
positive effect on the Newfoundland and Labrador Benefits VEC. Two of the other socio-
economic residual effects are positive, and two are negative.
None of the potential cumulative effects could be evaluated quantitatively. Table 20.11
summarizes the only conclusions that could be drawn regarding cumulative effects on
socio-economic VECs.
New Millennium Capital Corp. Section 15 Project Schedule
Technical Report DSO Feasibility Study Page 95
April 2010
Amended as of February 16, 2011
Table 20.11: Cumulative Effects on Socio-economic VECs, DSOP
VEC Cumulative Effect
RailTransportationofOre Positiveeffectonrevenuesofthreeconcernedrailcarriers.
AvailabilityofWorkers Noeffectpredicted.
SubsistenceHuntingandTrapping Insufficientdataforprediction.
NewfoundlandandLabradorBenefits Verypositiveeffect.
Mitigation Measures
Approximately 170 standard mitigation measures were identified, divided into the
following categories:
Tree-cutting and Management of Wood;
Erosion and Sedimentation;
Watercourse Crossings;
Transmission Line Rights-of-way;
Solid-waste Management;
Management of Hazardous Materials;
Drilling and Blasting;
Construction Equipment;
Mining Operation;
Management of Ore, Stockpiles, Tailings, Mine Waste and Overburden;
Water Management;
Process Water;
Effluent;
Air Quality;
Restoration.
The importance of effects was evaluated taking into account the application of those
standard measures.
Wherever necessary and feasible, special mitigation measures were identified on a
case-by-case basis with a view to enhancing positive effects and reducing the
importance of negative effects. Residual effects were evaluated taking into account the
application of such measures.
Component Studies
Component studies were conducted in the following areas: fish and fish habitat;
archaeological and heritage sites; gender equity; Schefferville Innu and Naskapi land-
and resource-use and traditional ecological knowledge; hydrogeology; breeding birds;
terrestrial ecosystem mapping; commuter mining; and Aboriginal health.
They are all appended to the EIS.
A helicopter-based survey of caribou was also carried out in collaboration with LIM in
May 2009. Its purpose was to ascertain the presence of sedentary caribou in the general
vicinity of the DSOP deposits immediately before the calving season. The field results
were inconclusive. The results of DNA analyses of samples collected from two female
caribou will be available in early 2010.
New Millennium Capital Corp. Section 15 Project Schedule
Technical Report DSO Feasibility Study Page 96
April 2010
Amended as of February 16, 2011
Table 20.12 summarizes the proposed monitoring programme.
Table 20.12: Monitoring Programme, DSOP
Valued
Ecosystem
Component
Activity
AirQuality SamplingforTPMandPM10atworkerscampover12monthsduringminingat
Timmins3N.
Noise WithoutBlasting
Monitornoiseatworkerscampduringdayandnight.Monitorthenoiseemitted
bythegeneratorfittedwiththeenergyrecoverysystemduringthefirstdaysthat
itisinoperation.
WithBlasting
Maintainrecordofblastingdata(vibrationspeed,groundvibrationfrequency,air
pressure,dynamitingpatterns).
WaterQuality SurfaceWater
Threetimesyearlymonitoringofwaterqualityparameters(temperature,pH,
conductivity,oxygen,turbidityandpreviouslyanalyzedmetals)usingthe
techniquesalreadyusedandotherappropriatetechniques.Samplingstations:
Timmins1,2and6;tailingspipelinebetweentheProcessPlantandTimmins2pit;
ElrossCreek;GoodreamCreek.
Groundwater
Parametersdescribedforsurfacewater,plusnitratesandmetals,willbesampled
inatleastfourobservationwellsthreetimesyearlyandinthedrinkingwaterwell
sixtimesyearly.
WaterBudget LocalizedDryingup
Readpiezometersmonthly.MonitorflowgaugingstationsinDSO313andDSO3
14.
ModulatingWaterRegimen
MonitorfluctuationsinlevelofTimmins1.
SurficialDeposits Fieldvisitsduringremovalofsubstrateandtopsoil.
Annualinspectionofstoragesites.
Wetlands LossofWetlands
Fieldvisitstocheckthatareaofwetlanddestroyeddoesnotexceedthearea
predicted.
Annualinspectiontoevaluatesuccessofrelocatingwetland.
DryingupofWetlands
InstallpiezometersintwowetlandsnearTimmins4tomonitorwatercontentand
drainage.
Migratoryand
SedentaryCaribou
NoiseDisturbance
Migratory:Financialcontributiontopopulationmonitoringby
government/academiainexchangeforresults.ParticipationinCARMA.
Sedentary:Helicopterbasedsurveyinspringofeveryfourthyearovera50km
radius,includingcollectionofsamples,forgeneticanalysisandsatellitecollaring.
AdhoccollectionofsamplesforgeneticanalysisfromNativehuntersand
outfittersclients.
LossofHabitat
Migratory/Sedentary:Monitoringoflossesofhabitatofsedentarycaribou.The
resultsofothersurveyswillalsobereviewed.
HarvestedMammals HuntingandtrappingsuccessbytheconcernedFNswillbemonitoredatfiveyear
intervalsusingthetechniquesdescribedinAppendixDoftheEIS.
Resultsofmonitoringoflossesofhabitatofsedentarycaribouwillbeemployed.
New Millennium Capital Corp. Section 15 Project Schedule
Technical Report DSO Feasibility Study Page 97
April 2010
Amended as of February 16, 2011
Valued
Ecosystem
Component
Activity
Theresultsofgovernmentsurveysandofscientificstudieswillalsobereviewed.
Wolverine Baitedpostswillbesetupwithina50kmradiusoftheELAIOMeveryfiveyears
andwillbemonitoredforoneyear(seeEnvirotel3000inc.February2008).
TheworkoftherecoveryteamfortheEasternCanadawolverinepopulationwill
bemonitored.
WolverineswillbeincludedintheinterviewswiththeconcernedFNs.
Birds Surveyswillbeconductedeveryfiveyearsusingthetechniquesdescribedin
AppendixFoftheEIS.
FishandHabitat VisualinspectionforpostblastingfishmortalityinPinetteCreek.
CaribouSubsistence
Hunting
ThisVECwillbeaddressedinthefiveyearsurveysofharvestedmammals
describedabove.
LocalEmployment Monthly,quarterlyand annualreportsonplaceofresidence,ethnicaffiliationand
genderofallemployeesattheminesitewillbeprepared.
LocalContracting Willbeaddressedinthereportsonlocalemploymentmentionedabove.
Newfoundlandand
LabradorBenefits
Themonthly,quarterlyandannualreportsdescribedintheNLBPwillidentifythe
benefits(employment,contracting,taxes,royalties)flowingtoNewfoundlandand
Labrador.
Trapping Trappingwillbeaddressedinthefiveyearsurveysofharvestedmammals.
Familyand
Interpersonal
Relationships
NMLshumanresourcespersonnelwillworkindividuallywithemployeeswho
commutetoidentifyproblemsrelatingtofamilyandinterpersonalrelationships.
Subjecttoissuesofconfidentiality,examplesofproblemsandsolutionswillbe
addressedintheannualreportdescribedabove.
CommunityCohesion TheeffectsoftheELAIOMoncommunitycohesionwillbemonitoredatfiveyear
intervals.
Maintenanceof
Community
Populations
Themonitoringforlocalemployment,localcontractingandNewfoundlandand
Labradorbenefitswillcollectdataontheplaceofresidenceofemployees.Those
datawillbeanalyzedeveryfifthyearforchangesofresidencethatmightindicate
animportanteffectonthisVEC.
GenderEquity ThereportsonlocalemploymentandNewfoundlandandLabradorbenefitswill
alsoaddressgenderissues.
Prepareandimplementanemploymentequity/womensemploymentplanbefore
startofconstruction;monitorimplementationofplanyearly.
CaribouSport
Hunting
AnnualdiscussionwiththefouroutfittersidentifiedinSection5.5.7.3oftheEISto
discussanyperceptionofeffectsofELAIOMontheirbusiness.
LocalInfrastructure
andServices
AnnualmeetingswithScheffervilleAdministrator,airportmanager,healthand
socialservicespersonnel.MaintainregularcontactwithCSSSdelHmatite,which
administerstheScheffervilleDispensary.
RoadSafety NMLssecuritypersonnelwillrecordallaccidentsandcompileanannualreport.
Maintenanceof
SocialStability
MaintainaregisterofincidentsinvolvingnonNativeworkersandlocalpersons.
Monitorappearancesbeforeitinerantcourt.
MaintenanceofLocal
LabourForces
ThenumberofformeremployeesofNNKand NIMLJhiredfortheELAIOMwillbe
recordedannuallyinthereportonlocalemployment.
Other Annualmeetingswillbeheldwithalllevelsofgovernment,theconcernedFNs,
communities,concernedindividualsandotherorganizations.
The following response plans are described in outline in the EIS and will be developed in
full prior to or upon the release of the ELAIOM:
Emergency Response/Contingency Plan;
New Millennium Capital Corp. Section 15 Project Schedule
Technical Report DSO Feasibility Study Page 98
April 2010
Amended as of February 16, 2011
Environmental Protection Plan;
Rehabilitation and Closure Plan;
Employment Equity Plan.
Fundamental Conclusions
The following fundamental conclusions can be drawn:
only approximately 94 ha will be disturbed, some 46% of which has already been
disturbed by prior mining activities;
there will be no significant negative effects on biophysical VECs;
there will be no effects on 28 socio-economic VECs;
there will be low negative effects on two socio-economic VECs;
there will be positive effects on three socio-economic VECs, and the effect on the
Newfoundland and Labrador benefits VEC will be significant;
there is little public concern about, or interest in, the ELAIOM in Labrador West;
in the absence of the ELAIOM, it is likely that the regional transportation and
energy infrastructure will be decommissioned, which will virtually eliminate any
serious likelihood that the mineral potential of large areas of Labrador West,
Labrador North and Qubec will be able to be developed economically in the
foreseeable future.
Issues of Concern
The principal issues of concern are:
to ensure that the predicted benefits for the people and government of
Newfoundland and Labrador are attained or exceeded;
to ensure that negative impacts on sedentary caribou are avoided.
EIS for AG1a Submitted to the GC
The Project for purposes of the EIS for AG1a tabled with the GC consists of the
reconstruction and operation of the railway between M353 and the Timmins Site and the
construction and operation of the rail car loading station (the Railway Project) and the
explosives factory/magazines (the Explosives Project).
An analysis of the potential sources of effects of the Project reveals that the following
sources merit further consideration:
Explosives Project a spill during the transportation of hazardous products
between the rail head at the Timmins Site and the explosives factory and from
there to the blasting site;
Railway Project the reconstruction of the rail line and the associated site-
clearing; the operation of the rail line and the rail car loading station; a derailment;
and an accident during the importing of hazardous materials.
Valued ecosystem components were selected on the basis of the nature of the Project,
the federal scoping decision, public information/consultation, a literature review and
professional judgment.
The following VECs were retained:
New Millennium Capital Corp. Section 15 Project Schedule
Technical Report DSO Feasibility Study Page 99
April 2010
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Explosives Project environmental integrity in the event of a spill of hazardous
products;
Railway Project the atmospheric and vibro-acoustic environment; sedentary
caribou; Rusty blackbird; the use of cottages in the vicinity of Bean Lake and lac
Star for recreational and subsistence purposes; the safety of workers and of
persons using the vicinity of the rebuilt rail track for recreational or subsistence
purposes; and environmental integrity in the event of a spill of hazardous products.
The effects assessment concludes as follows:
Explosives Project
in the event of a spill of hazardous products, a negative effect of minor to
moderate importance would occur on environmental integrity;
Railway Project
there would be no effect on the Rusty blackbird;
the effect on ambient air quality would be at most a negligible negative one;
a negligible negative effect would occur on the vibro-acoustic environment;
a negative effect of negligible importance would be experienced by the users of
cottages near Bean Lake as a result of noise and vibrations, while there
would in all likelihood be a negligible negative effect or no effect at all on
cottage-users in the area of Bean Lake and lac Star arising from dust;
a negative effect of minor importance would occur on sedentary caribou, should it
be present in the study area;
in the event of a derailment, a negative effect of minor to moderate importance
would occur on the safety of workers and other persons in the vicinity of
the rail track;
in the event of a spill of hazardous substances, a minor to moderate negative
effect would occur on environmental integrity.
Given that the Project will not cause any important effects, combined with the finding in
the EIS for AG1a tabled with the GNL that the ELAIOM will not be the source of any
significant cumulative effect, we find that there is no potential for important cumulative
effects from the Project.
The monitoring programme proposed for the ELAIOM will capture any unexpected
effects arising from the Project.
The following response plans will be applied:
NMLs generic Environmental, Health, Safety and Sustainability Manual;
a Health, Safety, Environment & Quality Management System for the Explosives
Project;
an Emergency Response Plan for the Railway Project.
20.7.4 First Nations
Status of Land-Claims Settlements and Negotiations in Potentially Affected Areas
The James Bay and Northern Qubec Agreement (JBNQA), signed in 1975, resolved
the Qubec claims of the Cree and the Inuit of Qubec. Those of the Inuit extended to
the vicinity of DSO4. The Northeastern Qubec Agreement (NEQA) and
New Millennium Capital Corp. Section 15 Project Schedule
Technical Report DSO Feasibility Study Page 100
April 2010
Amended as of February 16, 2011
Complementary Agreement No. 1 to the JBNQA, both executed in 1978, resolved the
Qubec claims of the Naskapis.
The First Nations whose land-claims settlements and negotiations may fall in potentially
affected areas are listed in Table 20.13
Table 20.13: Status of Land-Claims Settlements and Negotiations
First Nation Status of Land-Claims Settlements/Negotiations
NaskapiNationofKawawachikamach
(NNK)(Kawawachikamach,
Qubec)
NaskapisassertrightsinandtopartsofLabrador,includingDSO
Projectsites,butclaimnotyetacceptedbyGCorGNL.
NationInnuMatimekushLacJohn
(NIMLJ)(Schefferville,Qubec)
NIMLJclaimspartsofQubecandLabrador,includingallthe
depositsoftheDSOProject.ClaimacceptedbyGCin1979and
byGQin1980,butnotbyGNL,andnegotiationsareinprogress
onlyforQubecportionofclaim.
InnuTakuaikanUashatmakMani
Utenam(ITUM)(Septles,Qubec)
ITUMclaimspartsofQubecandLabrador,includingallthe
depositsoftheDSOProject.ClaimacceptedbyGCin1979and
byGQin1980,butnotbyGNL,andnegotiationsareinprogress
onlyfortheQubecportionofclaim.
InnuNation(Natuashishand
Sheshatshit,Labrador)
INClaim,whichextendstotheLabradordepositsoftheDSO
Project,acceptedfornegotiationbyCanadain1978,subjectto
participationofGNLandcompletionofalanduseandoccupancy
studybyInnu.Conditionsfulfilledin1991,andformaltripartite
negotiationsbeganinJuly1991.
InnuNationpresentedlandclaimsproposalonMay18,2001,
thatbothGCandGNLfoundtobeareasonablebasisfor
negotiations.
TheexecutionoftheNewDawnAgreementbytheGNL,Energy
CorporationofNewfoundlandandLabradorandInnuNationon
September26,2008providesguidancetoNMLontheobligation
ofnegotiatinganIBAwithInnuNationfortheportionoftheDSO
ProjectlocatedinNLifafinallandclaimagreementisratified.
TheAgreementdeterminesthattheareaoftheDSOProjectin
Labradorwilllieinaneconomicdevelopmentareaandstates
thattherightoftheInnuapplicabletotheeconomic
developmentareaswillbelimitedtoanIBAforanyMajor
Development.AlthoughtheAgreementdoesnotdefineMajor
Development,webelievethatthedefinitionthatwillbe
adoptedwillcapturetheDSOProject.InnuNationwill,
therefore,havealegalrighttoanIBAfortheLabradorportionof
theDSOProject,butthatisunlikelytooccurbeforetheimpact
assessmentoftheDSOProjectiscompleted.
InnuNationmayassertclaimsinandtopartsofQubec.These
claimshavenotbeenacceptedbyGCorGQ.
LabradorInnuclaimsarenotbelievedtoextendtoDSOProject
areasinQubec.
Impacts and Benefits Agreements
Based on the information set out in the preceding sub-section, NML is attempting to
negotiate IBAs that will encompass both phases of the DSOP with each of NNK, NIMLJ,
ITUM and Innu Nation. It tabled draft IBAs with each of the First Nations on August 21-
22, 2009. On December 11, 2009, NML tabled its final proposal with each of the First
Nations, requesting that they indicate by January 15, 2010, whether they agree to
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conclude an IBA by March 20, 2010. On 21 January, 2010, NML formally suspended
negotiations with the IN, ITUM and NIMLJ, the three First Nations that had indicated their
unwillingness to negotiate. NML has formally advised governments of the efforts that it
has made to negotiate balanced IBAs and its decision to put the money to be provided
under the terms of its Final Offers in a trust fund for the benefits of the FNs.
Only NNK responded positively to NMLs invitation to negotiate and NML will develop a
new financial package that may reconcile the demands of the NNK and the financial
requirements for a viable DSOP and consequently bring the parties to sign an IBA before
the end of the first quarter of 2010.
To date, NML has executed memoranda of understanding with the NNK and NIMLJ.
20.7.5 Local Communities
In recent years, it has become normal practice for resource developments to make
special efforts to ensure that the communities closest to them share in the benefits that
the projects generate. NML has offered to negotiate with the Ville de Schefferville, which
is the only non-Native community that has the potential to be directly impacted by the
DSO Project, with a view to possibly concluding a benefits-sharing agreement, but it has
not received a firm response from the Ville de Schefferville.
20.7.6 DSOP Phase 2
Applicable Environmental Assessment Regimes
Assessment Group 2a
AG2a is expected to trigger the provincial regime established by Section 23 of the
JBNQA (EQA, Chapter II, Division III)
1
and the CEAA.
Section 23 of the JBNQA applies with minor exceptions to all of Qubec north of the
55th parallel of latitude. Schedule 1 of JBNQA Section 23 specifies that all mining
developments, including significant additions, alterations or modifications to existing
mining developments, are automatically subject to EIA. Air and ground reconnaissance,
survey, mapping and core sampling by drilling are, however, permitted without the
preparation of an impact statement.
The provincial regime of JBNQA Section 23 establishes the Kativik Environmental
Quality Commission (KEQC) (5 Qubec members, including Chair; 4 Inuit members).
The federal regime established by Section 23 of the JBNQA should not be triggered,
since there is no component of the project under AG2a that would be under federal
jurisdiction, such as a landing strip. That understanding is based on correspondence with
the Principal Advisor JBNQA of the Canadian Environmental Assessment Agency in
September, 2009.
11
In Moses v. Canada, the Qubec Superior Court ruled on March 30, 2006, that the CEAA does not
apply in the Territory of the JBNQA, because the assessment process established by the CEAA is
incompatible with that established by section 22 of the JBNQA. The Court of Appeal upheld that ruling.
Both sides appealed that judgment. Pending the outcome of those appeals, the CEAA continues to
apply. The application for leave to appeal was granted by the Supreme Court of Canada on October 16,
2008. The appeal was heard on June 9, 2009, but, as of the time of writing, the Courts decision had not
been rendered.
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The scope of the application of the CEAA, if any, should be known in the coming weeks,
as the project description was filed on December 18, 2009.
Assessment Group 2b
AG2b is expected to trigger the same environmental assessment regimes of general
application established by the CEAA and the EPA as those that apply to AG1a as set out
previously although the existence of a federal trigger will not be confirmed until
sometime in the first quarter of 2010, as the project description was tabled on December
18, 2009.
Assessment Group 2c
AG2c is expected to trigger the same environmental assessment regimes of general
application established by the CEAA and Division IV.1 of the EQA of the GQ as those
that apply to AG1b as set out previously. Again, the existence of a federal trigger will
be confirmed only some time following the tabling of the project notice.
General Timetable
Assessment Group 2a
JBNQA Section 23 does not create timetables for the regimes that it creates, except that
the KEQC must render a decision within 90 days of a determination by the Qubec
Administrator that an EIS is adequate (JBNQA 23.3.25).
After reviewing a project, the KEQC recommends whether or not the Administrator
should authorize the project and establishes any conditions that it judges appropriate for
authorization. The Administrator then sends the final decision to the proponent, who
must comply with its terms and conditions.
The EIA of recent projects of a similar scale (i.e., Nunavik Nickel Mine Project of
Canadian Royalties; Kuujjuaq Thermal Generating Station Project of Hydro-Qubec)
suggest a timeline of four months between the tabling of the project notice and the
receipt of the guidelines (the KEQC does not use the generic guidelines used by the GQ
south of the 55th parallel of latitude) and of 12 months from the tabling of the EIS to the
delivery of the certificate of authorization (Table 20.14).
Table 20.14: Tentative KEQC Timeline for Environmental Impact Assessment
of AG2a
Description Completion Date
TablingofProjectNotice December15,2009
IssuanceofGuidelines April15,2010
TablingofEIS April30,2010
ReceiptofAuthorization April30,2011
Should AG2a trigger the EIA process under the CEAA, Table 20.15 presents a tentative
timeline.
Table 20.15: Tentative GC Timeline for Environmental Impact Assessment
of AG2a
Description Completion Date
TablingofProjectNotice December18,2009
IssuanceofScopingDecision April1,2010
TablingofComprehensive/ScreeningStudy April30,2010
ReceiptofAuthorization(ifcomprehensivestudy) January30,2012
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ReceiptofAuthorization(ifscreeningstudy) January30,2011
A screening assessment under the CEAA would take three months less than the KEQC
process, while a comprehensive study assessment would take nine months longer.
The anticipated dates of receipt of the environmental authorizations from the GQ and the
GC, even in the event of a comprehensive study assessment, are compatible with the
mining schedule for AG2a.
Assessment Group 2b
Table 20.16 and Table 20.17 present the tentative timelines for AG2b under the GNL
and the GC processes respectively. The timeline for the GNL assumes that there will be
no public hearings.
Table 20.16: Tentative GNL Timeline for Environmental Impact Assessment
of AG2b
Description Completion Date
TablingofProjectRegistration December16,2009
MinistersDecisiononAssessmentType April1,2010
IssuanceofGuidelines June1,2010
TablingofEIS June30,2010
DecisiononEISAcceptability October30,2010
RecommendationtoCabinet November30,2010
Table 20.17: Tentative GC Timeline for Environmental Impact Assessment
of AG2b
Description Completion Date
TablingofProjectNotice December18,2009
IssuanceofScopingDecision April15,2010
TablingofComprehensive/ScreeningStudy June15,2010
ReceiptofAuthorization(ifcomprehensivestudy) March15,2012
ReceiptofAuthorization(ifscreeningstudy) March15,2011
Note: Application of CEAA uncertain until scoping decision received.
A screening assessment under the CEAA would take almost four months longer than is
estimated for the GNL process, while a comprehensive study assessment would add
almost 16 months.
The anticipated dates of receipt of environmental authorizations from the GNL and the
GC, even in the event of a comprehensive study assessment, are compatible with the
mining schedule for AG2b.
Assessment Group 2c
Mining of AG2c is not expected to start before 2022. There is a concern that
environmental releases obtained too far in advance of the start of production might lapse
or be cancelled. In the light of the foregoing, the timeline for the submission of the project
notices to the GQ and the GC will be determined once the mining schedule is more
firmly established.
20.7.7 Methodological Considerations
Scope of Assessments
The scope of the assessments for AG2a, AG2b and AG2c will be much less than that of
the assessment for AG1a, because the processing complex, the workers camp, the
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main access road and the rail spur from M353 to the Timmins Site will all be used for the
Phase 2 deposits and will not have to be re-assessed.
The environmental impact assessments for AG2a, AG2b and AG2c will be limited to the
pits, the access and haul roads, the overburden and waste rock piles, the disposal of
dewatering water and the road from DSO4 to DSO3.
ELAIOM GNL EIS as a Model
The EIS submitted to the GNL for the ELAIOM in December, 2009, was planned and
executed so as to expedite the preparation of the EISs for AG2a, AG2b and AG2c, in the
following ways:
a substantial part of the text on the rationale/need/purpose (EIS Section 3.0) will be
applicable and therefore reused;
many aspects of the project description (EIS Section 4) will be reused, since such
infrastructure as the processing complex, the workers camp, the main access road
and the rail spur from M353 to the Timmins Site will be used by every AG;
the descriptions of the local and regional study areas based on the literature (EIS
Section 5) will be applicable and therefore reused;
the methodology for evaluating impacts (EIS Section 7) will be identical for all the
AGs;
the same standard mitigation measures (EIS Appendix 5) will be used in all the
AGs;
the list of projects to be considered for cumulative impacts assessment (EIS
Appendix 14) will be applicable.
20.7.8 Overview
At the present time there is no reason to anticipate the emergence of any environmental
issue likely to lead to the refusal of a government to authorize the development of any of
the Assessment Groups.
20.8 Project Schedule
Upon completion of Environmental Permitting in early 2010, it is estimated that the
Project can be launched in the first quarter of 2010. However, due to long delivery times
for certain major items for the Project and subject to funding, engineering and
procurement activities have already started.
20.8.1 Advance Engineering
Advance Engineering Activities
Advance engineering activities are those that will improve the schedule by allowing the
early design and procurement of key equipment that impacts the critical path of the
project. This equipment is listed in Table 20.18 and is based on data received from the
vendors at the time of the Feasibility Study preparation.
Advance engineering activities also provide additional time to obtain the permits and
authorizations required for the project. Since some of them may well take longer to
obtain than estimated it is prudent to get an early start to these activities
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Advance Engineering Costs
The cost of the advance engineering activities is the cost to engineer and procure those
items of equipment that have an impact on the end date of the project schedule. For this
Feasibility Study, delivery times were provided by the potential suppliers of equipment
that also provided budget prices
Table 20.18 shows the estimated delivery times for all major items of equipment.
Table 20.18: Major Equipment Delivery Lead Times
Equipment Lead Delivery Time
Railcarrotarydumper 14
(*)
months
Stacker/reclaimer 24
(*)
months
Mineralsizer 40weeks
ConveyorsandFeeders 20weeks
DrumScrubber 22weeks
SlurryPumps 32weeks
DrumFilters 35weeks
Cyclones 22weeks
RodMill 35weeks
Jigs 26weeks
StackSizers 30weeks
WHIMS 26weeks
PanFilters 28weeks
TrainLoadingChute 32weeks
Spirals 24weeks
Thickener 22weeks
Switchgear 26weeks
(*)
Deli very times to be negotiated to improve schedule
In order to meet schedule dates, it will be necessary to negotiate delivery lead times for
some specific equipment that are better than those provided by the potential suppliers of
the equipment. For example, it will be necessary to reduce the delivery time for the
stacker/reclaimer and the railcar dumper at Pointe-Noire, from the present twenty-four
months to fourteen months or less. It is expected that this will be achieved through
successful negotiations at the time of placing a firm order. It is also planned to use the
existing WM stacker-reclaimer at Pointe-Noire for the first few months of operation until
the new stacker-reclaimer is installed.
20.8.2 Full Notice to Proceed
NML considers it possible that it will receive a Full Notice to Proceed, issued by Tata, at
the beginning of May, 2010. At that time, advance engineering will continue but at a
more detailed level and procurement activities will be stepped up.
One key aspect of the early effort will be the preparation and issue of a package to solicit
bids from construction contractors.
20.8.3 Key Milestone Dates
In order to complete the Project for initial production of concentrate to begin in the fourth
quarter of 2011, the key dates set out inTable 20.19 have been identified.
Table 20.19: Project Milestone Dates
Event Milestone Date
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StartofAdvanceEngineeringActivities 16November,2009
AdvanceNoticetoProceed 18March,2010
FullNoticetoProceed 31May,2010
StartofTimminsSitePreparationandConstruction 01June,2010
StartofConstructionactivitiesrelatedtotheDomeatthe
TimminsSite
10August,2010
StartofConstructionofRailwayfromNL/QCBordertoTimmins
Site
15August,2010
EndofConstructionofRailwayfromNL/QCBordertoTimmins
Site
30November,2010
EndofConstructionatTimminsSite 24August,2011
StartupofMineandProcessPlant 22October,2011
StartofConstructionatPointeNoire 06June,2010
EndofConstructionatPointeNoire
September,2011(CarDumper)
February,2012(Stacker/Reclaimer)
FullProduction 22November,2012
The major activities to be undertaken in that timeframe are described hereafter and
shown on the bar-chart presented as Figure 20.8.
The scheduled development of the mine and construction of the facilities at the Timmins
Site rely on the timely transportation of all construction materials and equipment from the
port of Sept-les to the E/RBJ Interchange via the CFA and QNS&L railways, from there
to Mile Post 353 (MP353) on the TSH railway and, finally, on the re-installed rail line to
the Timmins Site.
Until the railway from MP353 to the Timmins Site is re-established, which will be some
seven months after construction begins at the Site, all construction materials and
equipment will continue on the TSH railway to Schefferville, where they will be off-loaded
and then transported by road to the Timmins Site.
20.8.4 Feasibility Study
The Feasibility Study was started at the beginning of July, 2009, and this Study Report
was submitted for review by executive management at the end of January 2010.
20.8.5 Production Start-up
Start-up of production will be initiated immediately following the end of construction. The
start-up and commissioning will focus on having at least one of every piece of equipment
and one of every system functional so they can be fed with feedstock. Commissioning of
complementary equipment and systems will take place while the plant is operational.
Start of production is scheduled to start in the third week of October 2011. It is expected
that the plant will attain 10% of its nameplate capacity for each of the first nine months.
The remaining capacity is expected to be achieved in the following four months thus
full production of 4,000,000 tonnes per year is expected in the year 2013, some 13
months after start-up.
New Millennium Capital Corp. Section 15 Project Schedule
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Figure 20.8: Summary Project Schedule
The production of Chinese ore will be an important swing factor in the supply - demand
balance for fines - much Chinese capacity is high cost and will be taken out of operation
if prices are too low.
20.9.3 Iron ore price development
In 2009 the big three producers established their benchmark prices that resulted in falls
of 32.9% for fines [Rio Tinto - Asia], 44.4% for lump [Rio Tinto - Asia] and 48.3% for
pellets [Vale - Europe]. Vale achieved a somewhat lower [28.2%] reduction for its fines,
thus clawing back the freight premium established by the Australians in 2008.
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20.9.4 Longterm Price Projection
In addition to obtaining the above-referenced Memorandum from an independent
consultant, NML also made use of long-term price forecasts developed by Jennings
Capital of Toronto, Ontario, Barclays Capital, BMO Capital Markets, and CIBC World
Markets.
With the worsening of a worldwide credit crisis during the second half of 2008, global
steel production started to decelerate rapidly in the industrialized countries. Capacity
utilization dropped to 50% in the US and EU as the credit market froze. As a result, for
the first time since 1999, crude steel production was lower than in the year before, with
production in 2008 being 1.2% lower than that in 2007. Only China, India and some
Asian countries had a positive growth. The economic crisis has been termed as the
worst since the depression of the Thirties, and there were fears about a prolonged
contraction of growth worldwide as the major economies went into a deep recession.
Against this background, the worlds 20 major economies (the G20) met and agreed to
inject an unprecedented amount of funds into the system to revive world economy and
avert a total collapse. Much of the resultant spending went into infrastructure
construction and to stimulate automotive production, and increased activity in both of
these sectors had a positive impact on the demand for steel. Given the sizes of their
economies and the depth of the downturn, the additional spending has slowed the rate of
contraction in industrialized countries and recovery is now expected to begin during the
second half of 2009. However, the economies of the two largest developing nations,
China and India, have held up remarkably well. The continuation of growth in these two
countries is credited to their internal demand, which has not been affected by the
banking crisis faced by the industrialized nations. Only China and India are projected to
have some growth in 2009, whilst, in spite of the projected improvement for the world
economy, global crude steel production in 2009 is expected to be reduced by 10% or
more.
The economic crisis is having a devastating impact on the demand for iron ore. The fall
in crude steel production during the second half of 2008 reduced the demand for iron ore
and major ore producers cut back their production to match the fall in demand. The spot
price of delivered iron ore to China fell drastically from a record high of $200 (CIF) during
March-April, 2008 to $65 in October 2008. In order to avert a sharp slowdown, in
November 2008 China announced a huge stimulus package totalling some $586 billion,
with funds earmarked to build highways, railways, ports, etc. Because of the weak
demand, steelmakers were demanding from iron ore miners a 40-50% cut for the 2009
contract price. Chinas announcement of the stimulus package provided a psychological
boost to domestic steelmakers as they started to buy lower priced and higher quality
imported ores, while many high cost domestic producers had to close their mines.
According to some reports, marginal capacity in China could be as much as 200 million
tonnes per year.
While the Chinese continued their record buying of imported ores in the early months of
2009, Japanese and Korean steelmakers accepted a 33% price reduction in May, 2009
from Rio and BHP. This was followed by a 28% price cut by Vale in June. Chinese
steelmakers still insisted on a minimum price cut of 40%. At the same time, the spot
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price rose to a high of $115 in early August, 2009, which was 50% higher than the
negotiated contract price.
In spite of the most severe downturn since the Great Depression, iron ore producers had
resisted a much steeper cut, which had been projected by analysts. This was not only
due to the strong bargaining power of the three big iron ore producers, but also because
of the emergence of China as a dominating force capable of influencing seaborne iron
ore prices. T
In December, 2009, iron ore cash price in the spot market were at a 45% premium over
the 2009 benchmark price. The higher price was driven by the fact that many high cost
Chinese mines were not viable at the low seaborne market price. As a result, the import
to China increased rapidly, putting pressure on the supply sources. This was further
underscored by the fact that Orissa State Government in India closed over 50 mines for
illegal mining and unauthorized practices. Other State Governments considered similar
actions. Based on the foregoing and changes in the market fundamentals, analysts
raised their price forecasts for the next two years and also increased the long-term price
outlook.
Based on forecasts by Ferrum Consultants, Jennings Capital, CIBC World and BMO
Cap[ital Markets, the projected longer term prices assumed for the financial analysis in
the Feasibility Study are as follows:
The long-term sinter fines (SF) price will be US 100.0/dmtu, FOB Pointe Noire to
Coruss plants in Europe.
The super-fine (SSF) price will be 5% lower, or US 95.0/dmtu.
20.10 Capital Cost Estimate
This Section covers the capital cost estimate for implementation of the ore mining,
processing, transporting and ship loading facilities and infrastructure required for the
Direct Shipping Ore (DSO) Project.
The following paragraphs outline the methodology used by NML and Met-Chem
personnel for the estimation of the capital cost of the ore processing facilities and
infrastructure. The resulting estimate is based on the application of standard methods
required to achieve a Feasibility Study with an accuracy of 15%.
20.10.1 Scope of Estimate
The current estimate covers the costs associated with the construction of the ore
processing facilities, namely the primary sizing station, the plant feed conveyor and its
drive house, the Process Plant feed conveyor, the Process Plant, the secondary crusher,
transfer conveyors, thickeners, the product storage and load-out facilities, the railcar
loading station, and the tailings and process water reclaim pipelines.
The capital costs estimate also covers the following areas:
Mining, including mine development, mine facilities and services, and mining
equipment;
Tailings disposal, including tailings delivery and process water reclaim systems;
The electricity generating station, its diesel generators and switchgear and
associated substation;
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A 69 kV line to transmit electricity from the Schefferville substation to a substation
to be installed at the Timmins Site
Infrastructure, including site development and roads, warehouse and maintenance
buildings, other ancillary buildings and facilities, fresh water supply and camp
accommodation;
Surface, service and emergency vehicles.
Modifications to the product storage and handling facilities at Pointe-Noire;
Extension and upgrade of the railway system from Ross Bay Junction to the
Timmins site.
20.10.2 Basis of Estimate
Currency Base Date and Exchange Rate
The base date for the cost estimate is the fourth quarter of 2009. The estimate is
expressed in Canadian dollars. No allowances for escalation or currency fluctuation are
included.
The exchange rates used were 1.00 US$ = 1.11 Can$ when quotations were received in
US dollars, 1.00 = 1.58 Can$ for quotations in Euros and 1.00 Aus$ = 0.91 Can$ for
quotations in Australian dollars.
Construction Labour Costs
The labour rate was established as an all-inclusive hourly rate by considering the basic
hourly rates for tradesmen, foremen, and superintendents provided by qualified
contractors for unionized workers. The contractors were selected based on their ability to
work in the DSO project area and environment. The estimate is based on the
assumption that labour rates are for a remote site.
The all-in labour rate includes the direct and indirect supervision, small tools and
consumables, clothing and safety supplies, transportation between home base and the
construction camp, contractors small tools, and site establishment facilities and
contractors overhead and profit.
Calendar and Productivity
The construction working calendar was established as ten hours per day, seven days
per week. The turnaround was established as four weeks in, two weeks out. In the
present Study, the productivity loss factor was established at 1.04, which takes into
account the fact that most of the work will be carried out inside the climate-controlled
Dome.
Labour Availability
Labour and construction resources were surveyed among qualified contractors currently
active in Newfoundland and Labrador. NML considers that trained and certified workers,
as well as construction resources, will be available.
Freight, Duties and Taxes
Vendors were requested to provide a price for the delivery of equipment to Sept-les,
ready for rail shipment to site by others. This freight cost was included as indicated by
the suppliers, and an additional 3.2% of the cost of the equipment was added to cover
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the rail shipments. If no freight costs were provided with the quotes, a factor of 13.2% on
the value of the goods was established to account for the freight from point of origin to
site, based on recent surveys and studies.
All duties and taxes are excluded from the estimate.
Design allowances and contingencies
In an estimate, provisions are included for different areas to reflect the level of definition
of the project. As such, design allowances and contingencies are two different, but
essential elements of cost. Their inclusion ensures that the estimate covers all needs
and requirements of the project scope.
The following definitions are taken from literature (AspenTech):
Design Allowances: Additional cost included in the estimates to cover the costs of
known, but undefined, requirements for an individual activity or work item.
In the Study, design allowances were not included and this was compensated by a
higher level of contingencies.
Contingency: A value added to an estimate to allow for unknown items. This may be
derived either through statistical analysis of past project costs or by applying experience
gained on similar projects. Contingency is not intended to cover changes in scope.
For the Feasibility Study, the contingency factor reflects the study teams knowledge of
the various aspects of the project and was applied to cover potential errors and
omissions and possible unknowns. In the study, the overall factor was estimated to be
11.4% of the direct costs.
It is to be noted that contingency is an expense, and as such, is expected to be spent
during the life of the project.
Civil and building works
Civil Work, Concrete Quantities and Unit Costs
Quantities for civil work, including site preparation, excavation and backfill, for concrete
work including building foundations, slabs on grade, elevated slabs and equipment
foundations, were calculated from site plans and from building layouts and elevation
drawings. Unit prices were obtained from qualified contractors or from information from
recent, similar projects.
Those unit prices were applied to material take-off quantities for the majority of the
buildings and infrastructure.
Quantities for site roads were estimated from the site layout. Unit costs for road
construction were established using information from recent similar projects.
An allowance was established for the upgrade of the existing access road.
Structural steel, Quantities and Unit Costs
The following quantities were calculated from layouts: structural steel including heavy
and medium steel, building frame, secondary and light steel including steel deck, stairs
with handrails, handrails and grating, building exteriors including insulated roofing and
cladding, louvers, windows, man doors and truck doors, building interior finishing
including block walls, offices and living quarters finishing, safety and security fencing and
chemical resistant lining where appropriate.
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Budget unit prices were obtained from qualified contractors and applied to material take-
off quantities.
Pre-engineered buildings
A budget price proposal was obtained for the camp accommodations including
dormitory, kitchen and recreational facilities. The proposal includes delivery to site and
installation.
A budget price proposal was obtained for the Emergency Vehicles Storage Building. The
proposal includes delivery to site and installation.
A budget price including delivery to site and installation was also obtained for the office
complex.
20.10.3 Equipment
Process Equipment
The process equipment list was derived from the flowsheets. Based on data sheets, data
tables and technical descriptions, budget prices were obtained from qualified suppliers
for more than 90% of the value of the process equipment. The remaining equipment was
estimated from recent database information for similar projects.
Equipment installation man-hours were estimated from a recently updated in-house
database for similar projects. A construction allowance to cover the cost of construction
material, sub-contracts and mobile cranes for installation was established at 2% of the
equipment cost, based on recent information for similar projects.
Piping and Pipelines
Process piping costs include supply and installation of pipes, slip-on flanges and back-
up rings, fittings and manual valves and freight to site. Unit costs for HDPE pipelines and
fittings were provided by a qualified supplier. Updated unit prices from in-house
databases were used for the remaining items. The labour hourly rate and productivity
factor were used to estimate installation costs.
Quantities for large bore process and water piping were calculated by take-off from
flowsheets and layouts. Quantities for service piping and small bore lines were
factorized. The percentage of total equipment direct cost was also taken into
consideration to estimate the overall piping cost. Installation man-hours were estimated
from in-house databases. The cost includes supply and installation of piping, flanges and
couplings, fittings and valves, secondary steel, supports and freight.
Pipelines were estimated as HDPE pipes supplied in fusion-welded 50 foot lengths, with
bolted flanges provided every 200 feet, and flanged connections for valves, instruments
and other equipment.
Quantities for the tailings pipeline and the fresh water and reclaim water lines were
calculated from layouts. Installation and bolt-up man hours were estimated from in-house
databases.
An allowance was included for service pipelines and sanitary waste water pipeline cost.
New Millennium Capital Corp. Section 15 Project Schedule
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Electrical and Instrumentation Equipment and Material
The electrical equipment and material list was derived from single line diagrams and the
mechanical equipment list. Quotations were received for most of the major equipment
and electrical material was estimated based on databases for recent similar projects.
Quantity take-offs for instrumentation and the plant communications system were made
from flowsheets and mechanical layouts.
Installation labour hours were established from in-house databases for similar projects,
adjusted for hourly labour rates and productivity factors specific to the DSO project.
Budget prices for equipment, instruments and materials were obtained from qualified
potential suppliers or from databases or recent similar projects.
For the diesel-fired generators, data sheets were prepared and issued to bidders based
on a complete installation package, including skid-mounted generating sets, fuel
distribution system, synchronization and control system, diesel day tank, sound-proofing
and heat recovery equipment. Suppliers were requested to provide an optimum system
in terms of capital and operating costs.
For the major items in the Timmins Site substation, the electrical list and single line
diagrams were used to obtain budget quotations from qualified potential suppliers.
For the transmission line from Schefferville to the Timmins Site, budget installation costs
were provided by qualified bidders that are familiar with the area, its climate and the
requirements of the NL authorities.
For the Timmins Site electricity distribution system, line quantities were calculated from
the Site layout and unit prices for poles were obtained from the quotations of qualified
potential suppliers
Auxiliary Facilities and Services
Mobile Equipment
Budget prices for mobile equipment were either established from in-house databases for
recent similar projects or based on quotations from qualified potential suppliers.
Fire protection
The fire protection requirements were developed by a qualified supplier based on
mechanical equipment and site layouts. The fire protection costs include the fire loop,
hydrants, sprinkler systems, specialized local fire protection required for electrical rooms
and hydraulic units and 200-foot fire hose reels. In addition to the ore processing
facilities, the fire loop will also service facilities outside the Dome, including the Primary
Sizing Station, the railcar loading station and the camp.
HVAC
An HVAC data table was developed to calculate the heating and process ventilation
requirements by area and facility, based on local conditions. These requirements meet
standard industrial needs as well as applicable codes and regulations. The HVAC costs
include the heating and ventilation equipment, ducting, mechanical installation and
freight.
The costs also include propane piping material, installation and freight as well as
excavation work. Budget prices were obtained from a qualified supplier for the
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equipment, ducting and installation. In-house databases were used to estimate the costs
of propane piping and excavation.
Shop Tooling and Storage
A data table was developed to define the tooling and storage equipment requirements by
area and facility. Mechanical, piping and electrical tool kits were also identified to
properly equip site service trucks and the truck servicing facilities. Budget prices were
obtained from industrial catalogues or allowances were made based on in-house
databases.
Office furniture and equipment
An allowance was included for each administration office, room and area to provide for
interior finishing, furniture and equipment such as work desk and chairs, cabinets and
bookshelves, as well as computer and office supplies.
Change Rooms Facilities
A budget price proposal was obtained for the provision of change rooms, including
interior finishing, water heating, service piping and also equipment such as lockers and
benches as well as restrooms.
20.10.4 Mining
Mine development
Mine development costs were estimated from quantities and unit costs developed in-
house by NML specialists experienced in the type of mining to be adopted for the DSO
project.
Mine equipment
It is intended that major mine equipment such as that listed hereafter will be purchased
directly from manufacturers under the terms of lease/buy agreements to be negotiated.
135 tonne haul trucks ;
10 m bucket capacity Front End Loaders;
6.5m bucket capacity backhoe style excavator;
Graders (Cat 16M or equivalent);
Tracked dozers (D-8G or equivalent);
Rotary blast hole drills 9.
The production equipment costs were based on budget quotations from
manufacturers/distributors and included transportation to Site and erection where
applicable. It was assumed that the costs will be redeemed by monthly payments over
ten years for the trucks and drills and as such, they are excluded from the estimate of
initial capital expenditure but are taken into account, as a capital lease, in the financial
evaluation. .
Mine Support Equipment
Budget prices, including delivery to site and, where appropriate, erection for mine
support equipment such as fuel and service trucks, mobile cranes, pick-up trucks, mine
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dewatering pumps, radios and mobile light towers were obtained from qualified potential
suppliers
Mine facilities and services
Budget prices for mine facilities and services, including mine dewatering, were
established from Met-Chem databases for recent similar projects.
20.10.5 Off-site Installations and Facilities
Rail Network
Budget pricing for modifications to the rail network between Schefferville and Sept-les
was obtained from qualified potential contractors, based on information provided by
AECOM.
It was assumed that the costs of rolling stock that will be acquired in the same manner
as mining equipment, will be redeemed by monthly payments over ten years for and as
such, they are excluded from the estimate of initial capital expenditure but are taken into
account, as a capital lease, in the financial evaluation. .
Port Facilities
The estimate of the cost of modifications to the WM Port Facilities at Pointe-Noire was
based on unit rates and on work carried out by Gnivar, adjusted to reflect revised scope
and other cost reduction measures.
20.10.6 Indirect costs
Met-Chem compiled indirect costs for its scope of work and that of others, based on an
implementation schedule developed in-house by NML
The various elements of indirect costs are addressed hereafter:
Project development costs
Those costs may include engineering studies to come such as further metallurgical
studies, independent reviews, environmental and social impact studies, occupational
hazard reviews and also the costs of permitting. Project development costs are shown
as provided by the Owner.
Project implementation costs
Project implementation costs include EPCM and owners costs.
20.10.7 Summary of the Estimate
The capital cost estimate is summarized in Table 20.23
Table 20.23: Summary of Capital Cost Estimate
A DI RECT COSTS Phase-I :: Ti mmi ns $239,160 000
INFRASTRUCTURE $98,054,111
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MINING $5,982,430
CRUSHING, PROCESSING, ORE STORAGE $132,100 000
AUXILIARY SERVICES
$3,024 000
A I NDI RECT COSTS Ti mmi ns $95,907 000
PROJECT DEVELOPMENT $2,359 000
EPCM (of direct cost) (including FIFO) AND OWNER'S
COSTS $60,883 000
CONTINGENCY
$30,461 000
FINANCIAL COSTS $2,205 000
A TOTAL CAPI TAL COST TI MMI NS $335,067 000
B DI RECT COSTS Phase-I I :: Goodw ood $15,898 000
INFRASTRUCTURE $15,898 000
B
I NDI RECT COSTS Goodw ood $7,721 000
PROJECT DEVELOPMENT $200 000
EPCM (of direct cost) (including FIFO) AND OWNER'S
COSTS $5,373 000
CONTINGENCY $2,147 000
B
TOTAL CAPI TAL COST GOODWOOD $23,619 000
TOTAL PROJ ECT CAPI TAL COST $358,685,760
April 2010
Amended as of February 16, 2011
21.0 INTERPRETATION AND CONCLUSIONS
21.1 Interpretation
The DSO Project is a major project that will significantly add to Canadas iron ore
production capacity, as well as to world capacity. A Pre-feasibility Study of the DSO
Project was completed in February, 2009, and it not only confirmed NMLs belief that the
project is both technically feasible and financially viable but also demonstrated that the
project would be capable of producing iron ore in a form and of a quality suitable to be a
captive source of supply of raw material to feed the Corus steelmaking facilities owned
by the Tata Group of India, the worlds sixth largest steel producer.
Of particular importance to the DSO Project is the announcement made by NML on
October 1, 2008, that Tata Steel Global Minerals Holdings Pte. Ltd. (Tata) of
Singapore, a member of the Tata Group, had become a strategic investor in NML by
purchasing 19.9% of NMLs shares. Under the terms of the deal, after NMLs completion
of this Feasibility Study for the DSO Project, Tata Steel will have an option for a 180 day
period to acquire an 80% equity interest in the DSO Project. Upon exercising the option,
Tata will pay 80% of NMLs costs incurred to the exercise date to advance the DSO
Project. Tata will arrange funding for up to $300 million to earn its 80% share and will
commit to take 100% of the DSO Projects iron ore production for the life of the mining
operation. Any excess in capital costs over $300 million will be funded 80% by Tata and
20% by NML.
Following an in-depth review of all aspects of the Feasibility Study, the interpretation of
the Study is summarized as follows:
Resource estimation
The deposits that are the basis of the DSO project were explored and drilled in
the past by IOCC, and historical drill hole data, geological maps and cross-
sections that were in the public domain was recovered by NML. SGS Canada
Inc. (Geostat) verified that this data was correctly computerized and found no
significant errors. In some instances, new drill holes were drilled close to
historical ones and twin hole comparisons were made. Geostat concluded that
historical and modern holes compare favorably and that it was safe to use the
historical holes in the mineral resource estimation. Only the Goodwood deposit
has a significant number of historical drill holes.
Under the procedure adopted by NML, the principal assay laboratory selected
sample pulps and directed them to a control laboratory without the intervention of
NML. Geostat has examined the available QA/QC data and although it found
very minor biases between the principal and control laboratories, it considers that
the drill hole data is reliable enough to support a mineral resource estimation.
In making the resource calculation, a bulk density of 3.0 tonnes per cubic metre
was used, as were the following cut-off grade parameters:
Fe 50%
Mn 3.5%
SiO
2
18%
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The density value is historical and no bulk density measurements were made in
the recent exploration campaigns, but Geostat considers that such a value, even
though not measured, is safe to be used as it is most probably conservative.
Reserve estimation
Resource block models, created by Geostat usingthe Geostat Software Library,
were imported into MineSight mining software to create three-dimensional
mining block models, which contained the same blocks as the resource models,
with additional parameters applied to assist in mine planning.
Engineered pits were designed for each deposit based on economic pit shells.
The economic pit limit for each deposit was determined using the EPIT module of
the MineSight mining software. The EPIT module uses the Lerch-Grossman 3D
(LG 3D) pit optimization algorithm to develop the configuration of each open pit
at the end of its economic life, based on the total of estimated Measured and
Indicated resources and thereby obtain the optimum pit that will generate the
maximum profit. The LG 3D algorithm is a true pit optimizer based on the graph
theory in operations research and it operates on a net value calculation for all the
ore blocks in the model. A number of parameters are input into the software to
calculate the results, including mining, processing, transportation, handling and
ship loading and administration costs, product sales price, and maximum pit
slope angles. The software applies these parameters to the ore and waste blocks
of the 3D block models to determine optimum pit shells.
Based on the economic pit shells, several pits were designed and engineered for
each deposit and were compared on a net value basis, those with the highest
values being selected to arrive at the mineable reserve, and it was estimated that
mineable reserves for the ten deposits totalled 64.1 million tonnes of ore grading
59.8% Fe with an average waste to ore stripping ratio of 1.24 and an average
resource recovery of 95.5%.
The basis and details of the mineral reserve estimate have been subject to an in-
depth peer review by, amongst others experienced in the mining, processing,
transportation and consumption of DSO-type ores. The consensus of the
reviewers is that the mineral reserve estimate has been made in accordance with
appropriate industry standards and best practices for a Feasibility Study of a
mine development project and that the quality of the work undertaken by NML is
such as to provide an accurate estimate of the mineable reserves available at
this time.
Although only ten of the 22 deposits that comprise the DSO Property have been
drilled, sampled and analyzed, the DSO Project as addressed in the Study has a
Mineral Reserve base of 64.1 million tones, sufficient to sustain mining and
processing at a commercial rate for the 10 years used as the basis for the financial
analysis. It can therefore be assumed that the DSO Project can be expanded in the
future to operate profitably for additional several years to come;
The extent of the bench and pilot plant scale test work carried out not only by
laboratories but by manufacturers of appropriate processing equipment is such that
the flowsheet developed from the results of such test work is well defined and will
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achieve the required processing of the DSO hematite ore into products meeting the
specifications of potential customers and in particular those of Tata.
All environmental aspects of the Project have been addressed in detail and
considerable progress has been made to get the approval of the necessary
provincial and federal authorities. Subsequent to much field work and the completion
of numerous baseline studies by specialists in various aspects of the environment
local to the DSO Property, detailed Environmental Impact Studies (EIS) were
submitted to the governments of Canada, Quebec and Newfoundland and Labrador
in December, 2009, after Project Notices had been submitted. Throughout the
development of the project, NML has maintained close contact with the relevant
First Nation communities and has demonstrated its willingness to inform and, to the
extent practical, involve those communities at all stages of the development of the
Project through Impact and Benefit Agreements where possibly;
As for the management of tailings, so as to minimize the likelihood of any adverse
effect upon the local environment, NML proposes to use the mined-out Timmins #2
pit, which investigation has shown to contain water but no fish, as both the tailings
containment basin and the process water reservoir.
To the extent practical, NML will make use of infrastructure abandoned by IOCC
and, in many of the previously disturbed areas, it is possible that NML will right the
wrongs of the previous operator by landscaping and revegetation of old waste
dumps
Given the terms of the deal with Tata, NML has not actively pursued other potential
customers, but in that the quality of its products will meet Tatas specifications, they
are likely to meet the most stringent specifications of other steelmakers;
The long term sales prices used in the financial analysis are in line with those
published by analysts specializing in the sea-borne trade of iron ore.
21.2 Conclusions
Enough NI 43-101 compliant resources have been established for a sustainable
project having an acceptable mine life;
NMLs exploration work has demonstrated a close correlation between the historical
resources and the recent resources defined by the NML drilling programs.
The extent and quality of detailed engineering work performed is more than
adequate for a Feasibility Study of this type and level of accuracy.
The economics of the project appear to be robust and will absorb variances in
parameters such as product price, capital costs and operating costs.
Pilot plant tests using representative bulk samples have established that the
selected flowsheet, when processing a blended plant feed, will upgrade the ore to
achieve a product grading, on average, Fe > 64.5% and SiO
2
+ Al
2
O
3
< 4.5%.
Pilot plant test results have also established that the following iron recoveries can be
achieved on a dry basis:
Blue ore 80%
Yellow ore 75%
Red ore 70%
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22.0 RECOMMENDATIONS
Although the overall opinion as to the extent and quality of the work done in preparing
the Feasibility Study is favourable, there are a number of specific areas in which
additional work is recommended.
Even though bulk density measurements were made for different ore types using
Sonic drill core, additional measurements for ores from different ore bodies should
be continued. Such measurements should include bulk density, dry density and
moisture content.
Future exploration drilling to convert historical resources to NI-43-101 compliant
reserves and resources should include the following:
Area DSO 2: Star Creek 2 was not drilled by NML. This deposit has to be drilled
to classify the historical resources to the measured/indicated category in
compliance with the requirements of NI 43-101
Area DSO 3: Timmins 3N zone B and C were not drilled by NML. These two
zones need to be drilled. Timmins 8 and Barney 2 are the two remaining deposits
that need drilling to confirm the historical tonnages and grades.
Area DSO 4: The drilling done in deposits Kivivic 3N and 3S and Kivivic 5 was
only exploratory. These two deposits require in-fill drilling to enable the quantity
and grade of reserves to be fully evaluated. NML acquired deposits Kivivic 2 and
Kivivic 1C in an Asset Exchange and the data from previous drilling are sporadic.
The only information available is the historical resources and therefore these two
deposits need to be drilled in two phases, the first of which will be exploratory.
The Goodwood deposit needs drilling at its southeastern boundary to define the
potential extent of ore and waste on surface and at depth.
Before construction starts, additional geotechnical investigation has to be made at
the proposed location of the Process Plant and other facilities.
Geotechnical work will need to be done in order to assess likely pit-wall stability.
Hydrology investigation needs to be completed around the Timmins #1 and Timmins
# 2 pits to better understand the groundwater movement, and elsewhere to predict
more precisely the amount of pit dewatering that will be required for the mining
operation.
Further investigation of permafrost should be instigated in order to better define its
location, depth and thickness.
Additional testing is required to better understand the freezing of ore in railcars and
to be able to reduce the cost of product drying to confirm.
More precise definition of the mine equipment and rolling stock maintenance
program is required, to be able to develop adequate training programs.
Truck simulations should be reviewed the size, make and model of truck and refined
the required size of the fleet.
In order to maximize the use of resources, an investigation should be made to
determine the optimum grade of plant feed that could be upgraded to meet the
customers specifications.
Secondary haul roads need more definition and possible adjustments depending on
the final truck selection, as referred to above.
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The rail and port tariffs need to be confirmed and binding agreements concluded
with the various operators to confirm the accuracy of the operating cost of the
results of the Financial Analysis as presented in the Feasibility Study Report
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23.0 CERTIFICATES
This Technical Report was prepared by the listed Qualified Persons, and delivered to NML on
April 9, 2010 and amended on February 16, 2011.
April 2010
Amended as of February 16, 2011
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April 2010
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April 2010
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New Millennium Capital Corp. Section 15 Project Schedule
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New Millennium Capital Corp. Section 15 Project Schedule
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April 2010
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24.0 REFERENCES
Author Subject Date
Bokela
Dewatering of different fractions from iron ore beneficiation for
the New Millennium Project
October 2009
COREM
Project T1075 New Millennium Capital Corp. Characterization,
Crushing and Screening of Bulk Samples
November 17, 2009
Project T1114 Feed size testing No date
Project T1114 Scrubber testing December 21, 2009
Ferrum consultants
THE WORLD IRON ORE MARKET:
supply-demand balance and price outlook
August, 2009
FLSMIDTH Dorr-
Oliver Eimco GmbH
Vacuum Filtration and Sedimentation Test Work Report DV
0199/Section 3 For Messrs.New Millennium Capital Corporation
for the DSO Project
October 15, 2009
Genivar Technical Memorandum Railway Infrastructure inspection July 27, 2009
MBE Coal &
Minerals
Technology GmbH
New Milennium
Batac pilot plant tests
October 12, 2009
Batch stratification test withBATAC Test work
Schefferville Iron Ore deposit, Canada
November 2009
Midland Research
Center
Report on Wash Testing of Two Direct Shipping Ores August 28, 2009
Mineral Processing
Division, National
Metallurgical
Laboratory,
Jamshedpur
Beneficiation of Iron Ore from Canada August, 2009
Outotec (USA) Inc Beneficiation of Iron Ore by Spiral, Floatex and SLon November 2, 2009
Outotec
Test Report TH-0490 High Rate Thickening of WHIMS and
SlimesTailings Sample
November 2009
Studiengesellschaft
fr Eisenerz-
Aufbereitung
Investigation of Six (6) Direct Shipping Ores originating from
deposits near Schefferville Quebec, Canada,
January, 2009
Report about Laboratory Testwork with Iron Ore Samples from
Schefferville Direct Shipping Ores
May, 2009
Table of Results Area 3 Composite testing December 16, 2009
Table of Results Area 4 Composite testing on -1 mm December 4, 2009
Table of Results Area 4 Composite testing on -0.5 mm December 16, 2009
UMA doing
business as
AECOM
Operations Analysis of Timmins Mine, Schefferville, Emeril and
Pointe Noire including Interchange at Ross Bay Junction and
Arnaud Junction
December 8, 2008