Done deal. Cyclone has completed the acquisition of the Block 103 magnetite iron ore project. Pic: via Getty Images
Cyclone now owns the world’s largest undeveloped magnetite iron ore project
Mining
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Cyclone is now the proud owner of the Block 103 project in Canada, which it describes as being the largest, undeveloped magnetite iron ore project in the world.
The project has a non-JORC NI 43-101 compliant mineral resource of over 7.2 billion tonnes grading 29.2% iron contained within its 7,275ha footprint in the Labrador Trough, one of the largest iron ore belts in the world accounting for 99% of Canada’s iron ore.
The combination of the non-JORC NI 43-101 the Preliminary Economic Assessment (PEA) study completed by BBA have highlighted Block 103’s potential to produce large volumes of direct reduction pellets for a low cash cost by leveraging the low stripping ratio (0.4:1), and the access to competitive hydro-power.
Being located in an established mining jurisdiction with existing producers such as Rio Tinto, Champion Iron and Tata Steel, Cyclone Metals (ASX:CLE) will also benefit from access to heavy haul rail and hydropower.
Further highlighting how serious the company believes the project is to its future, it had earlier this month appointed iron ore and steel veteran Paul Berend as its chief executive officer to drive active development of Block 103.
Executive chairman Tony Sage said the successful acquisition of Block 103 positions the company to meet the growing demand for high quality magnetite concentrates and pellets.
Berend added that with more than US$35m already spent on the project, all studies and modelling done to date suggest that the company could be looking at a world class iron ore asset with a clear pathway to production.
“I am very excited by the opportunity to develop one of the most competitive magnetite iron ore resources in the word; at a time when the steel industry desperately needs a large and low-cost supply of magnetite concentrates and pellets to reduce its carbon footprint,” he noted.
Cyclone had paid the vendor 2.16 billion CLE shares at the deemed price of 0.25c per share to complete the acquisition.
Low carbon steel
While magnetite projects are normally costlier to build than hematite mines due to the need to process the lower grade ore into a concentrate, the process also results in a super-high grade concentrate that is far more amenable to low carbon emissions steelmaking.
The availability of hydropower also has the potential to drastically reduce the carbon footprint of Block 103 processing operations, which is yet another tick on the environmental checklist.
Development is aided by proximity to established open access rail infrastructure and logistic services.
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.
