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Century Iron Mines Corporation research and analysis

Contributed by eResearch

Century Iron Mines Corporation has reported recent drilling results for its Rainy Lake and Joyce Lake prospects.

The 2012 definition drilling program at Rainy Lake began in February 2012, with 102 holes (19,800 metres) completed by September 10, 2012. The first batch of 2012 assay results confirmed the grade and thickness of the 2011 program. Highlights of the 2012 results included the following: Hole RL12-0103 - 277.8 metres of taconite iron mineralization grading 28.77% total iron (FeT); and Hole RL12-0804 - 230 .4 metres of taconite iron mineralization grading 29.82% FeT. The strike length of the taconite zone has increased to 10 kilometres over a width up to 2.8 km and a vertical thickness up to 340 metres. The zone remains open along strike to the north.

At Joyce Lake, a program of exploration and definition drilling was initiated in February 2012 to expand and better define the zone of high-grade iron mineralization. As of September 10, 2012, 7,807 metres of RC drilling had been completed. The first batch of assay results confirmed a zone of high-grade iron mineralization at Joyce Lake ,with intercepts up to 54 metres over 60% total iron (TFe%) and with an average of 6.09% silica (SiO2). A 30-tonne bulk sample, of representative DSO-type mineralization, was collected from trenches in different sectors of the mineralized zone.

The tables showing the assay results from the prospects are contained in Century Iron’s September 19, 2012 and September 24, 2012 news releases, available on SEDAR at www.sedar.com.

COMMENT: Resource calculations and preliminary economic assessments (PEAs) are likely to be ready in late 2012 and early 2013 respectively. This is especially significant in the case of the Joyce Lake DSO project, which Century Iron plans to bring into production in 2015, the first of all of its projects.

THE COMPANY

Century Iron has interests in four iron ore projects in Canada (see the table below). The Duncan Lake project (1,613 Mt in total NI 43-101 estimated resources, grading 24%-25% Fe) is located in western Quebec, while three others (with no resource estimates to date) are located in the Labrador Trough region of Quebec/Newfoundland and Labrador. The Company owns the biggest collection of iron ore claims in Canada by area.

The Company has two strategic Chinese shareholders: WISCO (25%) and Minmetals (5%), which have offtake agreements for 70% of future production. Century Iron has around $60 million in cash, earmarked for exploration and acquisitions.

Century Iron’s current strategy is to develop the DSO (Direct Shipping Ore) projects first (Joyce Lake, Lac Le Fer and Schefferville West), bring them into production starting from 2015, and use the proceeds to develop lower grade and more capital-intensive BIF (Banded Iron Formation) projects.

According to management, DSO targets have up to 7Mt each @ 60%+ Fe and thus would be mined for 3-4 years. Lower-grade material would be stockpiled at first and processed afterwards. The Company estimates that DSO targets have up to 50Mt of lower-grade (around 50%) material each.

The Full Moon, Joyce Lake, and Lac Le Fer projects are expected to obtain resource estimates in late 20122013. Duncan Lake now has an updated resource estimate, and expects to receive a PEA late this year. Joyce Lake and Lac Le Fer could obtain PEAs some time in 2013.

Century Iron plans to bring the Joyce Lake DSO project into production in 2015. After that, the Lac Le Fer (see the map below) and Schefferville West (Altius properties) projects should start producing. The Company plans to use cash flows from producing DSO projects to build the railway to the Full Moon project (Rainy Lake on the map below) and other infrastructure for the BIF projects, including Duncan Lake.