CALGARY, Alberta, Canada (Globe Newswire – December 18, 2018) – 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.
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