Cyclone Metals flags potential to power Iron Bear with renewable energy

• Cyclone Metals’ power study highlights potential to power Iron Bear project entirely with renewable energy
• Project to leverage new and existing hydropower and planned windpower farms
• Study de-risks project and will enable very low carbon emissions for its green steel iron ore products

Special Report: A power study demonstrates that the Iron Bear iron mining and concentrator project of Cyclone Metals in Labrador, Canada, could be powered entirely by renewable energy, significantly de-risking the operation.

The study by global engineering consultancy firm Hatch evaluated three staged power scenarios for Iron Bear, which has a resource of 16.6 billion tonnes just down the road from Bloom Lake complex mined by the $2 billion-capped ASX-TSX listed play Champion Iron (ASX:CIA).

Phase 1 requires 120 megawatts of power for a concentrator complex with operating capacity of 10Mtpa.

This increases to 250MW in phase 2 for a 25Mtpa concentrator while phase 3 will require 500MW for a 50Mtpa.

Cyclone Metals (ASX:CLE) said the study, which complied with AACE class 5 standards and leveraged Hatch’s proprietary modelling software to simulate power balancing scenarios based on historical hydrological and wind data, found that phase 1 could be powered by a new 60MW hydropower plant at Menihek and a new 280MW windfarm.

This will be supplemented by a 10MWh battery energy storage system and two 315 kilovolt power lines connected to the Churchill Falls hydroplant in phase 2. A third power line from Churchill Falls will help meet energy requirements for phase 3.

“This power study is a substantial derisking milestone for the Iron Bear project,” managing director Paul Berend said.

“The study demonstrates that Iron Bear project benefits from a privileged access to complementary renewable hydro and wind power, which drives lower than expected unit power costs and will also translate into a very low carbon emissions for our green steel iron ore products.”

Iron Bear project

CLE’s Iron Bear project in Labrador is underpinned by a clear operational plan to rapidly de-risk the asset and to enable strategic partner Vale to make a decision to mine within three to five years.

All activities and resources required to achieve this goal are funded by Vale as part of a development agreement.

This agreement gives the Brazilian mining giant the right to provide up to US$138m of funding in two phases to earn 75% of Iron Bear.

Once a decision to mine is achieved, Vale will have the right to acquire Cyclone’s remaining 25% JV equity interest at a “fair market value”, subject to Cyclone shareholders’ approval if required.

Alternatively, Vale can elect to arrange production capex funding on a non-dilutionary basis for Cyclone. In this case, Cyclone retains 25% of the Iron Bear JV with no dilution.

Besides defining significant iron resources, work to date has included metallurgical testing that established that ore from the project can be used to produce a direct reduction grade concentrate grading 71.3% iron and 1.1% silica oxide and DR-grade pellets containing 67.5% iron and 1.6% silica oxide.

Key upcoming milestones are the release of the de-risking studies for rail and the imminent release of the scoping study by the end of June 2025.

CLE is also preparing to carry out a large drilling program in the summer of 2025 that should significantly expand the higher confidence indicated resource and enable the design of mining pits.

Additionally, test work has started for the design of a dry tailings solution for the mining operation, a critical development in building the sustainable mining solution as a part of the company’s risk mitigation strategy as it will remove the need for a tailings dam.

This article was developed in collaboration with Cyclone Metals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.