ML Gold To Explore Alternatives for Unlocking Value of Block 103 Iron Ore
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February 9, 2017
ML Gold To Explore Alternatives for Unlocking Value of Block 103 Iron Ore
ML Gold Corp. (TSX-V: ML G; FSE: XOVN.F) (“ML Gold” or the “Company”) reports
that recent increases in iron ore prices have resulted in a resurgence of interest in iron ore
deposits worldwide. This has piqued investor interest in the Company’s 100% wholly owned
Block 103 Iron Ore resource in the Labrador Trough, near Schefferville, Quebec. As a result,
ML Gold is evaluating all potential alternatives regarding Block 103.
The Block 103 Property has a NI 43-101 Inferred Ir on Ore Resource of 7.2 billion tonnes at
29.2% total iron (“TFe”) and 18.9% magnetic iron (“magFe”). In 2012 and 2013, prior to
the collapse in price and demand for iron ore, the Company engaged Watts, Griffis and
McQuat Limited (“WGM”), and BBA Inc. (“BBA”), consulting ge ologists and engineers, to
complete an initial independent mineral resource estimate and a subsequent Preliminary
Economic Assessment (“PEA”) for Block 103 (filed on Sedar on June 27, 2013).
Block 103’s inferred resource covers an area with a strike length of approximately 4
kilometres (km) and a width of 2.5 km. Based on all available information, including drilling
and magnetic airborne surveys, the banded iron formations hosting the inferred resource
extend the length of the property, over 12 km, indicating mineralized zones remain open
toward the northwest, southeast and at depth.
In June, 2013, the Company released the resu lts of the PEA completed by BBA. Based on
use of only 25% of the known resource, th e PEA provided the following highlights:
Initial Capital disbursement of CAD$4.185 billion for the co nstruction (leading to the
start-up) of the first production line and required infrastructure and additional capital
costs of CAD$1.794 billion for the construction of a second production line.
Commercial production for the first line commencing within 5 years of initial
investment and the second line in the following year.
Pellet production rate of 16.6 million tonnes per year of superior quality acid pellets
from two production lines at a grade of 67.0% iron.
Pre-tax IRR of 19.3% at $110(US) per tonne iron.
NPV (discounted at 8%) of CAD$7.383 billion at $110(US) per tonne iron.
Payback period of 7.0 years.
Total Operating Costs (excluding royalties) of CAD$62.87 per pellet tonne freight on
board at Port of Sept-Iles (averaged over the first thirty years of production).
Assumes use of existing railway infrastruc ture, hydropower availability from Nalcor
and current Port of Sept-Iles expansion infrastructure for ship loading services.
The preliminary economic assessment described above is historical, was preliminary in
nature and was based on a resource calculated at an inferred category which by nature is
considered speculative and cannot be categorize d as mineral reserves. As such there is no
certainty that the preliminar y economic assessment will be realized. The basis for
the preliminary economic assessment relied on the assumptions made at the
inferred mineral resource level, and was limited by the qualifications and assumptions made
by the independent qualified persons responsibl e for the report, in this case those under
employment of the independent firms WGM an d BBA. The information presented above was
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a preliminary economic assessm ent on the Block 103 Property which has no impact on the
feasibility of the project. No feasibility study was ever completed.
The PEA and its internal calculations were co mpleted on the assumption that the Canadian
and US dollar were at parity. The impact of the current 32% difference in the US-CDN
exchange rate will be significantly positive on operating costs and margins but negative on
the initial capital build costs. ML Gold has not initiated any studies to compare the impact of
new exchange rate regimes. Al though the current spot price of iron ore is approximately
$80 (US) a tonne and the PEA was based on a spot price of $110 (US), market premiums
for iron pellets are at historic highs and a dd another $70 a tonne to the spot price for 67%
iron pellets.
Since the completion of the PE A in 2013, much has changed in the market for iron ore and
in the specifics regarding development of iron ore projects in the Labrador Trough. In
addition, government investment in infrastructure including rail, shipping port and power
has increased dramatically as local governments are attempting to kick start the region.
At present, management has made no decisi ons with respect to the planned course of
unlocking the value contained in the Block 103 Property, but will immediately begin to
assess all strategic options available.
Adrian Smith, P.Geo., is the qualified person for the Company as that term is defined in
National Instrument 43-101, and has supervised the technical information presented within
this news release.
ABOUT ML GOLD CORP.
ML Gold Corp. is a Canadian listed company, focused on creating shareholder value through
discoveries and strategic deve lopment of mineral properties in Canada and the United
States.
For additional information please visit the Company’s website at www.mlgoldcorp.com. You
may also email [email protected] or call investor relations at (604) 669-2279.
ML GOLD CORP.
“Andrew Bowering”
Andrew Bowering
Chairman
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This news release may contain certain “Forward‐Looking Statements” within the meaning of the United States Private Securities Litigation
Reform Act of 1995 and applicable Canadian securities laws. When or if used in this news release, the words “anticipate”, “believe”, “estimate”,
“expect”, “target, “plan”, “forecast”, “may”, “schedule” and similar words or expressions identify forward‐looking statements or information.
These forward‐looking statements or information may relate to future prices of commodities, accuracy of mineral or resource exploration
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Vancouver, BC Canada V6E 2K3
T: 604-669-2279 / F: 604-602-1606
activity, reserves or resources, regulatory or government requirements or approvals, the reliability of third party information, continued access
to mineral properties or infrastructure, currency risks including the exchange rate of US$ for CDN$, changes in exploration costs and
government royalties or taxes in Canada, the United States or other jurisdictions and other factors or information. Such statements represent
the Company’s current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while
considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social risks,
contingencies and uncertainties. Many factors, both known and unknown, could cause results, performance or achievements to be materially
different from the results, performance or achievements that are or may be expressed or implied by such forward‐looking statements. The
Company does not intend, and does not assume any obligation, to update these forward‐looking statements or information to reflect changes in
assumptions or changes in circumstances or any other events affections such statements and information other than as required by applicable
laws, rules and regulations.