New Millennium Iron Corp. Announces Company Update and New Business Initiative
CALGARY, Alberta, Dec. 18, 2018 (GLOBE NEWSWIRE) — New Millennium Iron Corp. (“NML” or the “Company”) (TSX: NML) is pleased to report on initiatives taken in recent months to adapt to changed market conditions.
The Company also announces the study with assistance from independent advisors of new business opportunities aimed at diversifying its iron ore and infrastructure interests. To this end, Cairn Merchant Partners (“Cairn”) has been retained by NML to provide advisory services and analytical support to the new business initiative. In addition, a Special Committee of independent Directors has been formed to assist management and Cairn in reviewing opportunities and to make recommendations to the Board.
As the Canadian junior mining sector gradually recovers from the challenging commodity and capital markets of recent years, NML emerges in improved financial condition and able to consider strategies that can deliver nearer-term benefits to shareholders.
Focus on Stabilization
NML has more recently focused on stabilizing the Company’s finances through a rigorous program of cash conservation. Along with a significant reduction in expenditures through restructuring, an investment program initiated by specialist members of the Board has enabled the Company’s operations to be essentially cash neutral.
Working interactively with the Board to manage business priorities and general activity is a small, Montreal-based team, to which Robert P. Boisjoli was last month appointed as the Company’s CFO. Mr. Boisjoli is a founder of two companies and a board member of several public and private companies as well as non-profit organizations.
Port of Sept-Îles
An important achievement for NML was the December 2017 settlement of a disputed July 2012 contract with the Sept-Îles Port Authority (“Port”), which eliminated a long-term obligation while preserving the Company’s access rights to shipping capacity at the Port’s new multi-user wharf now in service.
This led to NML being able in November to complete the earlier announced sale of a portion of its reserved multi-user wharf capacity at the Port for $4 million in cash and a 20-year income stream from iron ore shipping fees expected to begin in 12 to 24 months, with the Company retaining sufficient capacity to support future development of its taconite iron ore properties.
NML’s roots are in iron ore and the Company continues to closely monitor market trends and events. NML remains well positioned to supply the global iron and steel industry from an extensive property position in the Labrador Trough featuring long-life, NI 43-101 compliant taconite reserves and resources that have been the subject of comprehensive feasibility work. The technical and engineering aspects are known and ready for discussion with potential partners and investors as and when market conditions permit.
The market environment remains challenging for greenfield projects such as the development of NML’s taconite deposits, but changed dynamics in the form of migration to higher quality iron ore in the world’s largest market, China, and elsewhere, have brought iron and steelmaker attention back to the uniquely attractive iron ore chemistry featured in the Labrador Trough.
NML participates in an active project in the region through its investment in Tata Steel Minerals Canada, which is now completing an iron ore beneficiating plant that will not only add high-grade ore to an established direct shipping ore product mix, but also year-round production capability, versus today’s shorter, seasonal operation.
Also of note is that the pellet segment of the iron ore market targeted by NML, for which the Company’s taconite ores are ideally suited, is presently very tight due to supply side constraints.
Important support for eastern Canadian iron ore has been provided by the Quebec Government’s investment in restart project activity and infrastructure. NML has been a beneficiary through its previously mentioned Port-related transactions.
These developments are positive and important contributors to both NML’s liquidity and positioning for the future, but production from the taconite properties is still some time away. The capital cost, long lead times for further marketing, permitting, community agreements, construction and ramp-up associated with our large-scale, mainly greenfield project undertaking all require a long-term perspective and commitment.
While NML considers new initiatives, the Company and its largest shareholder, Tata Steel, are reviewing their possible approaches with respect to the taconite properties.
About New Millennium
NML is a Canadian iron ore exploration, evaluation and development company with an extensive property position called the Millennium Iron Range (“MIR”) in Canada’s principal iron ore district, the Labrador Trough, straddling the Province of Newfoundland and Labrador and the Province of Quebec, in the Menihek Region around Schefferville, Quebec. The Company’s project areas are connected via a well-established, heavy-haul rail network to the Port of Sept-Îles, Quebec.
Tata Steel Limited (“Tata Steel”), a global steel producer and industry leader, owns approximately 26.2% of the Company and is the Company’s largest shareholder.
NML has a 4.32% interest in Tata Steel Minerals Canada Ltd. (“TSMC”), which is owner and operator of a direct shipping ore (“DSO”) project near Schefferville. The DSO project produces and ships sinter fines. Subsidiaries of Tata Steel and the Quebec Government’s financing arm, Investissement Québec, own the remainder of TSMC.
Beyond TSMC, the Company offers further development potential through a group of long-life taconite properties capable of producing high quality pellets and pellet feed to service the requirements of steel makers with either blast furnace or direct reduced iron making operations. Two of these deposits – LabMag and KéMag – were the subject of large-scale development feasibility studies carried out by the Company and Tata Steel and published in March 2014.
With these feasibility study results as a foundation and seven taconite properties now explored to a NI 43-101 compliant resource, the Company optimized its taconite development strategy through the design of a smaller market entry initiative called the NuTac Project, for which a NI 43-101 prefeasibility study was carried out and published in June 2016.
In the currently challenging market environment for new iron ore projects, NML has implemented cash conservation measures, while protecting its mineral claims and iron ore development positioning.
This news release contains certain forward looking statements and forward looking information (collectively referred to herein as “forward looking statements”) within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward looking statements. Forward looking information is often, but not always, identified by the use of words such as “could”, “should”, “can”, “anticipate”, “expect”, “believe”, “will”, “may”, “projected”, “sustain”, “continues”, “strategy”, “potential”, “projects”, “grow”, “take advantage”, “estimate”, “well positioned” or similar words suggesting future outcomes. In particular, this news release contains forward looking statements relating to the Meeting and the management information circular relating thereto. Although the Company believes that the expectations and assumptions on which the forward looking statements are based are reasonable, undue reliance should not be placed on the forward looking statements because the Company cannot give any assurance that they will prove correct. Since forward looking statements address future events and conditions, they involve inherent assumptions, risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of assumptions, factors and risks.
Management has provided the above summary of risks and assumptions related to forward looking statements in this news release in order to provide readers with a more comprehensive perspective on the Company’s future operations. The Company’s actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward looking statements will transpire or occur, or if any of them do so, what benefits the Company will derive from them. The forward looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward looking statements included in this news release are made as of the date of this news release and the Company does not undertake and is not obligated to publicly update such forward looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.
Chief Executive Officer
Tel: (514) 935-3204, X 349