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NR1224

10/23/2012

CALGARY, Alberta, Canada (Marketwire – October 23, 2012) – New Millennium Iron Corp. (“NML” or the “Corporation”) (TSX: NML) announced today that ore production of sinter fine products, by Tata Steel Minerals Canada Limited (“TSMC”), a joint venture between Tata Steel Limited and NML, is progressing well, with approximately 250,000 tonnes of production to date. The ore is grading over 63% Fe, and is being processed in a portable dry crushing and screening circuit before shipping (see news release 12-22 dated September 12, 2012). It is estimated that 300,000 tonnes will be produced in 2012. The installation of the dome structure is currently in progress. TSMC is on track to produce 2.0 million tonnes (“mt”) in 2013 and to produce 4.2 mt per year (“mtpy”) of sinter and super fines in 2014. TSMC is also developing plans to increase production to 6 mtpy in 2015 to maximize the use of the current facilities.

Dean Journeaux, President and CEO of NML, said: “We are at an important milestone in the Company’s history with the beginning of stripping in August and ore production in September of this year. This will allow TSMC to prepare the mines to feed the processing plant next year. We are very pleased that TSMC has decided to proceed with this interim step in order to ensure an orderly start-up of production in 2013. TSMC’s plans for a potential increase in capacity are also an important step for the future”.

2012 Production Plan:

TSMC has received necessary mining permits from the Government of Newfoundland and Labrador to mine the deposits located in the Timmins area, close to the processing plant. A portable dry crushing and screening plant is in operation. Contracts have been awarded for drilling and blasting as well as mining and hauling the ore to the plant and to load rail cars.

The operation will continue until end October 2012 when about 250,000 tonnes of sinter fines and 50,000 tonnes of lump ore are expected to be produced. Mine development will continue through winter to meet the production requirement for the next year.

Project’s Progress:

TSMC advises that the DSO Project is on track to produce 2.0 mt in 2013. Most of the necessary agreements are in place, and development and construction activities are on-going to achieve the estimated production targets of 4.2 mtpy by Q4, 2013 and 6 mtpy in 2015, as summarized below:

• MOU regarding the rail tariff with TSH. TSMC has invested $4.0 million for the track rehabilitation program in 2011. Another $4.5 million is being invested in 2012,
• QNS&L transportation agreement concluded,
• Agreement reached with KéRail, an independent operator, for 20 km spur from the plant yard limit to Schefferville,
• Five hundred and five ore cars delivered (100 t capacity),
• Use of deep water dock to be constructed in Sept-Îles to ship 5 mtpy, for which TSMC has agreed to invest $12M,
• Construction of the dock has commenced,
• Awarded contracts for drilling, blasting, mining, operation of screening plant and transportation of the products to the rail yard for shipment,
• Start of delivery and installation of the major process equipment in Q4, 2012 and remainder in Q1 & Q2, 2013,
• Start of commissioning of the equipment in Q3, 2013,
• Negotiations are underway to conclude interim transportation arrangements for the last leg of the logistics chain between Arnaud Junction near Sept-Îles to the Port of Sept-Îles’ existing terminal at Pointe-Noire until the deep water dock is available, expected in mid-2014.

Capital Cost Estimate:

During the feasibility study, (as of February 2011), the gross capital outlay for the Project, including leasing and financing, was estimated at US$ 428.5 million (or C$475 million at that time) for 4 mtpy of products (see news release 10-02 dated February 25, 2010). TSMC’s current estimate to complete the Project to produce 4.2 mtpy of sinter and super fines is about C$560 million including estimated requirements for working capital, and escalation but excluding estimated requirements for equipment leasing and mine closure rehabilitation.

The cost increases can be largely attributed to the following major factors: changes in the project’s scope, unexpected soil conditions, steel fabricated dome structure, increased EPCM cost, and increased cost of construction. Cost escalation expected to complete the project has now been included for inputs such as equipment, fuel and construction costs. NML will be required to contribute 20% of the equity portion relating to the initial capital costs in excess of $300 million, or approximately $16 million. The Project is expected to be financed with 30% equity and 70% debt.


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