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Century Iron Mines Corporation research and analysis

Contributed by eResearch

Century Iron Mines Corporation (“Century Iron” or the “Company”) and WISCO International Resources Development & Investment Limited (“WISCO International”) have completed the formation of their joint venture for Century Iron’s Attikamagen iron property (Quebec / Newfoundland & Labrador), with WISCO International (through WISCO Attikamagen) concurrently completing its initial $20 million investment in the JV.

Century Iron’s interest in Attikamagen is held by its subsidiary, Labec Century Iron Ore Inc., which holds a 56% interest in the project through a JV agreement with Champion Iron Mines Inc.

The JV will see WISCO Attikamagen investing an aggregate $40 million in consideration for a 40% interest in Labec Century, with a further $20 million to be advanced by September 26, 2013.

Further details are contained in Century Iron’s September 26, 2012 news release, available on SEDAR at www.sedar.com.

COMMENT: The announcement of the formation of the JV and the financial injection is very positive news. The focus will be on the Joyce Lake prospect, which the Company hopes to bring into production in 2015. This JV goes a long way to realizing that objective, and will be the Company’s first producing iron ore property. Part of the funds will be used for further exploration and part will be earmarked for infrastructure.

ATTIKAMAGEN IRON PROJECT

The Attikamagen iron project is a group of claims (an aggregate of 34,348 hectares) straddling the boundary between the provinces of Quebec and Newfoundland & Labrador, in what is known as the Labrador Trough (Century Iron’s net eamed-in interest at 60% is 20,609 hectares). The project is about 20 kilometres northeast of Schefferville, Quebec.

THE COMPANY

Century Iron has interests in four iron ore projects in Canada (see the table on page 3). 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 are located in the Labrador Trough region of Quebec/Newfoundland & 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. In addition to the $20 million Attikamagen injection, Century Iron has about $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 2012 or in 2013. 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 a railway to the Full Moon project (Rainy Lake on the map below) and other infrastructure for the BIF projects, including Duncan Lake.