Exploration Projects

Overview

NML controls the emerging Millennium Iron Range (MIR), a 210 km long taconite belt which has the potential of becoming one of the major iron producing regions in the world. Until now, only 20% of the range has thoroughly been explored. The initial target was the LabMag property. Although IOCC had undertaken drilling and development work between 1960-1980, the deposit resource potential was not fully delineated. Based on about 17,500 meters of drilling, 5.5 billion tonnes have been certified as NI 43-101 compliant. The deposit is open both to the north and south.
    
KéMag was periodically investigated by IOCC until 1971. It did not receive much attention as IOCC was concentrating on finding DSO resources. NML staked claims for KéMag in 2004 and started drilling in 2006. After drilling about 10,700 meters, 3.5 billion tonnes of resources were certified under NI43-101. Similar to LabMag, KéMag is also open to north and south. Based on a recent magnetometer survey, there is a strong possibility of continuity between the two deposits.

NML’s priority has been to advance the DSO Project to the production stage. In order to concentrate on the development of the DSO Project, NML discontinued provisionally exploration of the taconite properties in the MIR. In 2010 however, NML undertook an airborne magnetometer survey of the range and located 9 significant magnetic anomalies. NML has embarked on a $5.0 million program to explore two of the anomalies as well as investigate the area between the LabMag and KéMag deposits.

Management of NML estimates that it will publish NI 43-101 compliant resources along with a scoping study by Q2, 2012. NML’s intention is to seek another partner to develop a third project. The world demand for seaborne iron ore is growing strongly due to the urbanization drive in Asian countries. Currently, the supply has remained tight, resulting in higher spot market prices. Management of NML believes that due to the high quality of its resources, its location and proven project development abilities, it can take advantage of this market opportunity by advancing its projects.

Airborne High Resolution Magnetic Survey, MIR

In the autumn of 2010, Fugro Airborne Surveys conducted a high resolution magnetic survey over NML’s properties covering MIR. A total of 6,717 line-kilometres of data was collected, 4714 line-kilometres in the Province of Quebec and 2014 line-kilometres in the Province of Newfoundland and Labrador. The survey data was processed and compiled in the Fugro Airborne Surveys Ottawa office. The interpretation of the airborne magnetic data was done by NML’s geophysical consultant J. Hubert. The residual magnetic intensity data clearly delineates areas with significant concentrations of magnetite in the MIR. Potential targets occur in groups over the taconite all along the MIR in NL and QC. They are identified as MIR-NL1 to MIR-NL7 in NL.

Exploration Program

The taconite properties outside the Taconite Project area selected for exploration by drilling in 2011 include Lac Ritchie (MIR-QC4) in QC and Perault Lake (MIR-NL5) and Sheps Lake (MIR-NL4) in NL. In addition, the anomaly immediately in the south of KéMag (MIR-NL1) will be investigated. The results of ongoing studies show the possible continuity of the KéMag orebody into the area.   

2011 Drilling Program

Lac Ritchie

The drilling program started on August 7, 2011 with three drills. Initially, five holes were drilled spaced 2km apart along the strike of the taconite formation. These holes are located near the Sokoman-Menihek formations contact on the northeastern side of the property. The core samples were sent to Midland Research Center’s lab in the USA for tests and analysis. On October 25th, 2011, NML announced the initial drill core assay results from its 100% owned Lac Ritchie property. Initial assay results received to date represent 6 out of 40 holes drilled during the summer of 2011. NML is integrating the drill core analysis results into a geological block model for resource determination and classification by SGS Geostat Ltd, Blainville Québec.

Perault Lake
The taconite formation coinciding with the airborne magnetic anomaly (MIR-NL5) is well exposed and extends over a length of 20 km south of LabMag deposit. The approach to the drilling program will be similar to that being carried out at Lac Ritchie. During the first phase, 10 holes spaced 2 km apart are expected to be drilled along the strike at the northeast end of the formation.  Depending upon the results, additional holes are expected to be planned. The detailed drilling is expected to cover an area of approximately 10 km² with a total length of 3,500 meters.

LATEST NEWS ON HOWELLS LAKE AND PERAULT LAKE

Before winter, NML completed three drill holes in the Howells Lake area and two drill holes in the Perault Lake area (Refer to Figure 1). NML expects to start additional drilling on those properties by early March, 2012.

During the 2011 drilling campaign at Howells Lake area, three holes for a total of 347 m were drilled, where the Howells Lake airborne magnetic anomaly occurs. This area covers the taconite formation connecting the LabMag Deposit (NL) and KéMag Deposit (QC). One hole (06HR1279D) was drilled in 2006 and the results were published in 2011 (NR 11-25).

DRILLING RESULTS:

At Perault Lake, two holes for a total of 159 m were drilled. This area occurs south of the LabMag deposit and represents the southern extension of the taconite formation. The Perault Lake airborne magnetic survey anomaly covers a length of approximately 18 km. The core samples were sent to MRC Laboratory for tests and analysis. Table 1 shows the test and the assay results received to date from Howells Lake and Perault Lake areas (for drill locations, refer to Figure 2, NR1204).

Table 1

The drill core samples, half cores, on average 6 meters long, were sent on a regular basis to Midland Research Center Laboratory (“MRC”) at Nashwauk, Minnesota, USA (MRC is an independent laboratory) for analysis and testing. The core is assayed for Total Iron and the magnetite concentrate is produced using the Davis Tube and given as Davis Tube Weight Recovery percent (DTWR %). The magnetite concentrate is analyzed for iron and silica. Some selected samples will be assayed for other elements. Based on four hole drill core analyzed to date, the Howells Lake Taconite currently averages 31.26% Fe with 29.37% DTWR. The Davis Tube concentrate averages 69.56% Fe and 2.77% SiO₂. Two cross-sections, shown in Figure 3 & 4, are based on the Maps 1 & 2 of the Geology of the South Central Labrador Trough, compiled by R.J. Wardle in 1981 and published by the Department of Mines and Natural Resources, Government of Newfoundland & Labrador. The drill holes end within the iron formation and the layers beneath the LRGC (LIF and RS) are not considered economical. The geological interpretation for each section was made by taking the iron formation / quartzite contact point and projecting down-dip in the iron formation, which extends beneath the drill holes.

2012 Drilling Program:

Three drills are expected to be mobilized in February to start the work by early March, 2012. Approximately 80 holes for a total of 6,500 meters are expected to be drilled at the Howells Lake and Perault Lake areas. In addition, approximately 2,000 m of exploratory drilling will be carried out to evaluate the other airborne magnetic anomalies located in the Millennium Iron Range (MIR) and in other magnetic taconite prospects occurring outside the MIR, all of which are owned 100% by NML.

LATEST NEWS ON LAC RITCHIE

The drilling on the taconite property was completed on October 11, 2011 and during that period 40 holes for a total of 3,800m were drilled. NML published the first results of 15 holes on December 8th, 2011 (NR1138) and the additional results on January 19th and 20th, 2012 (NR1202 & NR 1203). The assay results received to date represent 32 out of the 40 holes.

Table 1 provides the LC unit test analysis and assay results received to date from 32 of 40 holes drilled (for drill hole locations, refer to Figure 2, NR1202). The average thickness of the magnetic mineralized formation of these 32 holes is 46.2 meters.

TABLE 1

The drill core samples, half cores, on average 6 meters long, were sent on a regular basis to Midland Research Center Laboratory (“MRC”) at Nashwauk, Minnesota, USA (MRC is an independent laboratory ) for analysis and testing. The core is assayed for Total Iron and the magnetite concentrate is produced using the Davis Tube and given as Davis Tube Weight Recovery percent (DTWR %). The magnetite concentrate is analyzed for iron and silica. Some selected samples will be assayed for other elements. Based on drill core analyzed to date, the Lac Ritchie taconite currently averages 31.05% Fe with 28.95% DTWR. The Davis Tube concentrate averages 67.82% Fe and 4.26% SiO₂. Two sections, 09 and 11, with 7 and 6 drill holes respectively intersecting the economic LC unit, are shown in Figure 3 & 4 with average test and assay results. (NR1202 & NR1203)