KéMag Property

Portions of the following information are based on assumptions, qualifications and procedures. For more information, please consult our legal page.

Geology

Historical Exploration and Development
The KéMag Property is located immediately to the west of Lac Harris and Lac Gillespie. Between 1949 and 1958, the Iron Ore Company of Canada (IOCC) carried out exploration mapping, sampling and test drilling to locate enriched iron ore deposits (DSO) around the KéMag deposit area. In 1968, IOCC conducted a remnant magnetism study with the objective to evaluate magnetic taconite deposits in the Lac Harris and Howells River areas,. In 1971, an airborne electromagnetic and magnetic survey was flown by IOCC over 518km² areas between Astray and Gillespie Lakes. This survey covered the KéMag deposit area. Even though IOCC was aware of the magnetic anomaly over the KéMag deposit, no follow up investigation was carried out. NML staked claims covering this area in 2004.

Mineralogy and Ore
The iron formation in the Lac Harris and Howells River areas consists mostly of recrystalized chert and jasper with bands (beds) and disseminations of magnetite. Some martite, which is oxidized magnetite, and hematite are also present. Other gangue minerals present are mostly iron silicates, particularly minnesotite and stilpnomelane and iron carbonates. The rock is fine grained and hard. The unit on the property that contains the highest consistent concentration of magnetite is PGC. LC and JUIF also contain higher concentrations of magnetite, while hematite is most common in LRC, URC and JUIF sub-members.

Silicate iron minerals are most prevalent in LC and in LIF. Iron carbonate Siderite commonly occurs in LC and LIF and minor amounts of manganese carbonates are also present. Goethite and limonite occur as coatings in fractured surfaces and are likely deposited by percolating groundwater. The principal ore mineral in the taconite formation is magnetite. The average total iron present in the rock is around 31.0%, of which 90% is magnetite. The concentrate is produced by fine grinding and using magnetic separation methods.

Drilling
The portion of the property that has been explored by diamond drilling has a strike length of 9.5km, oriented northwest-southeast, and iron formation is present along this entire length and continues beyond the property boundary. The following table gives details of the drilling carried out by NML in 2006, 2007 and 2008.

Resources
Based on the drilling conducted during the years 2006 to 2008, classified resources were made by SGS Geostat using a cutoff of 18% DTWR. The following Table gives the details:

Mining

The KéMag Deposit is expected to be mined using conventional open pit mining methods based on truck/shovel operations. The rock will be drilled, blasted and loaded onto large trucks that will deliver run-of-mine (ROM) ore to the primary crushers located at the pit edge half way along the strike length of the deposit. As the top of the orebody is near to the surface, little pre-production stripping is expected to be required in preparation for mining. However, sufficient waste rock is expected to be mined during the pre-production period to build the tailings dam, ROM pad and other general construction work such as site access roads. 
The mine is expected to be developed to support a nominal capacity of 21.2 mtpy of concentrate, comprising 14.2 mtpy of concentrate to support the nominal production capacity of 15 mtpy of pellets, plus 7 mtpy of concentrate for sale as pellet fines. Based on the results of metallurgical testing and geological block modeling work, the average calculated Davis tube weight recovery was 27.1%, equivalent to a concentration ratio of 3.68 tonnes of ROM per tonne of concentrate. This resulted in an estimated average feed requirement of 78 mtpy of crude ore to produce 21.2 mtpy of concentrate.
The KéMag Deposit contains seven economic layers of iron ore, each layer having different physical and chemical characteristics. Blending of material from the different layers in the pit will be carried out in order to:

• Ensure that concentrate produced contains less than 3% SiO₂;
• Generate the highest project net present value by optimizing the use of high weight recovery ore

• Feed the mill with a constant ore hardness to facilitate stable process plant operation.

KéMag ultimate pit outline

Environment

A preliminary analysis conducted in early 2009 indicated that some of the baseline data collected for the LabMag Project would be useful for the environmental assessment of the KéMag Project. Baseline data collection for the KéMag Project was, however, initiated only in spring 2011, at which time various avifauna surveys were conducted. A thorough programme of baseline data collection for the KéMag Project initiated in late summer 2011 and is expected to be completed in summer 2012.