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Century Iron Mines Corporation research and analysis

Contributed by eResearch

Century Iron Mines Corporation has increased its interest in the Duncan Lake iron project in western Quebec from 51% to 65%, having expended a further (and final) $14 million on the project, under an option and joint-venture agreement with Augyva Mining Resources Inc.

Century Iron has notified Augyva, and confirmation of the completion of the $14 million earn-in is subject to customary financial review by Augyva.

The Company has a joint-venture agreement with strategic partner WISCO International Resources Development and Investment Limited (WISCO), whereby WISCO has a 40% JV interest in Century Iron’s interest in Duncan Lake.

NI43-101 Technical Report Filed on SEDAR

Century Iron has filed an NI 43-101 Technical Report on SEDAR (www.sedar.com) for Duncan Lake. This followed the announcement of an updated resource estimate for the project in late August 2012 (see eResearch’s August 28, 2012 Perspective on the Company at www.eresearch.ca).

COMMENT: We expect that Century Iron will continue developing the Duncan Lake project despite the current adverse iron ore market situation. A Preliminary Economic Assessment for the project should be published early next year. We also expect that the long-awaited JV with WISCO, which will develop the project, will be finalized next year.

THE COMPANY

Century Iron has interests in four iron ore projects in Canada. 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 in the near future. 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.