1. business and industrial
2. energy
3. coal

LAMÊLÉE IRON ORE *
BUILDING A PROFITABLE IRON MINE IN Québec
• TSX-V LISTED COMPANY, (symbol LIR.V)
www.lameleeiron.com
March 2015
Agenda
•
•
•
•
•
•
•
•
Iron Ore Demand/Supply
The Company
Objectives and Plan
Location and Infrastructures
Lamêlée Deposit
PEA
Milestones and Roadmap
Conclusion
2
FORWARD LOOKING STATEMENTS
Certain information regarding LAMÊLÉE IRON ORE LTD. (the “Company”) including the assessment of future plans and
operations, may constitute forward-looking statements under applicable securities law, and necessarily involve risks,
including but not limited to risks associated with mining exploration, operating costs, production costs, volatility of
share prices, currency fluctuations, imprecision of resource and reserve estimates, environmental risks and ability to
access sufficient capital from internal and external sources.
As a consequence, actual results may differ materially from those anticipated in any forward-looking statements. Plans,
intentions or expectations disclosed in any forward-looking statements or information should not be read as guarantees
of future results or events, and will not necessarily be accurate indications of whether or when or by which such results
or events will be achieved. Except as required by law, the authors expressly disclaim any intention and undertake no
obligation to update any forward-looking statements or information as conditions change.
The PEA is preliminary in nature. It includes Inferred Mineral Resources that are considered too speculative geologically
to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves.
Moreover, there is no certainty that the PEA will be realized.
Qualified Persons
The complete NI 43-101 Technical Report ("Report") being prepared by CIMA+ will include an updated mineral
resource estimate and in-pit mineral resource estimate which were prepared respectively by Schadrac Ibrango, PGeo.,
PhD. and Jeffrey Cassoff, Eng. of Met-Chem. Both Mr. Ibrango and Mr. Cassoff are independent Qualified Persons as
defined by NI 43-101. The Report is being prepared under the direction of Jean-Sébastien Tremblay, Eng. of CIMA+ and
will be reviewed and certified by individuals responsible for their respective portions of the Report. Mr. Tremblay and
all other individuals providing certifications are Independent Qualified Persons as defined by NI 43-101. Among them
are, Mr. Mathieu Girard, Eng, of Soutex, David Bédard, Eng. of AMEC, Michel L. Bilodeau, Eng. independent consultant
and Jean-Sébastien Houle, Eng. of WSP.
3
The Company
September 2013
• Formed through the acquisition of a 100%
interest in the Lamêlée South Iron Ore
project from Fancamp Exploration Ltd.
• Lamêlée issued 45M common shares to Fancamp at a deemed price of $4.5M or $0.10
per share.
October 2013 to July 2014
• Since its creation, Lamêlée has raised $3,772,900 to finance its activities.
• Concluded an agreement with Duro Felguera, to allows them to perform work related
the PEA up to $1M cad with no cost for Lamêlée.
4
Company Highlights
(as at March 23, 2015)
O/S Shares
90,838,977
Fancamp
45,000,000
Gimus Inc. (base shares)
13,104,000
H/D Finanging
17,615,004
FT/ Financing
15,119,973
O/S Warrants
9,829,236
O/S Options
8,200,000
F/D Shares
108,868,214
Current Share Price
$0.05
Cash Position
$400K
Debt
DEBT FREE
5
Iron Ore Demand
• The big question mark is what is going to really happen with the
demand from India as its economy grows over the next decade.
6
Iron Ore Supply
•
•
•
•
Increasing demand for iron ore
will cause new supply to come
online.
Iron ore supply, 2010-2018, Mt *
2 500,000
Other
Australia
2 000,000
Europe
Ukraine
To meet Chinese demand for
iron ore, Brazil and mainly
Australia massively invested in
projects designed to export to
the growing Far East market.
1 500,000
Russia
China
India
1 000,000
USA
Mexico
Canada
500,000
Brazil
The Iron Ore coming from Brazil
and Australia content lots of
impurities
which
affect
negatively the blast furnaces
efficiency.
There will be a room for cost
effective small suppliers ( like
Lamêlée) to sell their high
quality products, to maintain
blast furnace efficiency, using
low impurities ore as a mix with
ore from domestic China, Brazil
and Autralia.
South Africa
2010
2011
2012
2013
2014
2015
2016
2017
2018
Top 5 iron ore exporters, 2018, Mt *
7
* Source CRU
The Objective
• To build a profitable iron mine at the southern end of the Labrador Trough
close to the Fermont iron ore camp.
• Pre-production is expected for Q4 2017.
The Plan
• To develop a 5-8M tonnes/year mining
operation.
• To produce a low cost, high grade iron
concentrate.
8
Existing Infrastructures
ArcelorMittal
Mt-Wright mine
Highway
389
ArcelorMittal
Railway
Power Line
161 Kv
Lamêlée
LABRADOR TROUGH OF QUEBEC
AND LABRADOR SHOWING THE
MAJOR IRON DEPOSITS, ROAD /
RAIL / PORT INFRASTRUCTURE
EXISTING
INFRASTRUCTURE CLOSE
TO THE MINE SITE
LAC LAMÊLÉE IRON DEPOSIT
LOCATED 5 KM FROM EXISTING
ARCELORMITTAL RAILWAY
(« CARTIER RAILWAY »)
9
Directors and Senior Executives
Pierre Lortie, Chairman of the board
Senior Business Advisor, Dentons Canada, former Director of Consolidated Thompson Iron Mines, former President & COO of Bombardier
Transportation, awarded the Order of Canada and a President of The Canadian Academy of Engineering, just to name few.
Hubert Vallée, President & CEO and Director
Former Senior Vice President at Consolidated Thompson Iron Mines, key player involved in the development, construction and start-up
production of the Bloom Lake Mine. Also worked for Quebec Cartier, now ArcelorMittal, Iron Ore of Canada and Cliffs Natural Resources.
Jean Depatie, Director
Geologist, former Director of Consolidated Thompson Iron Mines, former Director of Glamis Gold (Now Goldcorp), former Director/Officer
of a number of companies listed on US and Canadian stock exchanges.
André La Flèche, Director
Former Vice President Development and Vice President Finance and CFO at ArcelorMittal Mines Canada, Vice President Finance and
Administration for Alcan, Alcoa, Alstom and Cooper Lybrand.
Peter H. Smith, Director
PhD, PEng is a Director and a Founder of Fancamp Exploration Ltd. (“Fancamp”), where he serves as Chairman of the Board and President
and CEO. He is a Consulting Geologist and has over many years been a geological consultant to other mining exploration firms in North and
South America, Europe and Africa.
Marc Duchesne, CFO
CPA, Former Senior Vice President of Finance of Consolidated Thompson Iron Mines. He joined the company early 2006, handling the
different financing stages and off-take agreement.
Pascal Vallée, Vice-President, Project development and Logistics
Former Project Coordinator for Consolidated Thompson Iron Mines, key person for the start-up of the operation of the Bloom Lake mine,
also worked at Raglan Mine Xstrata and Quebec Cartier, now ArcelorMittal.
Ghislain Arel, Vice-President, Mining Development and Environment
Former Mine Manager for Consolidated Thompson Iron Mines, actively supervising the mining development of Bloom Lake mine, also
worked for Quebec Iron and Titanium, Mcwaters Mining and Genivar.
10
Experienced Team
Proventrack record. Developedand broughtto production the Bloom Lake
Iron Mine in Québec (2005-2010)
From the Mine
Concentrator
Load out facilities
and railroad
Efficient Transshipping
Ore handling yard
11
Lamelee Deposit
Section 300
Section 300
(West)
Section 600
S
Section 600 (East)
Section
looking West
Hematite and
Magnetite content
12
Section looking
West
Hematite
Hematite and
Magnetite content
Updated Mineral Resources Estimate
• Met-Chem carried out an updated Mineral Resource estimate based on the
results of the exploration work carried out during 2011 and 2012, which
consisted of 2 trenches and 57 holes for a total of 18,221 m. Additional
characterization work completed in 2014 included 3,133 Satmagan tests, 266
Davis Tube tests, as well as Heavy Liquid Separation tests on composite
samples.
• The Mineral Resources were limited to the tonnage of blocks constrained
within the Iron Oxide envelopes which include MIF (Magnetite Iron
Formation), HIF (Hematite Iron Formation) and MHIF (Mixed Magnetite
Hematite Iron Formation).
SUMMARY OF THE MINERAL RESOURCES
(Cut-Off of 15% T Fe)
Category
Tonnage
(Mt)
T Fe
(%)
Inferred
354.1
29.49
Mineral resources cannot be considered Mineral Reserves until they have demonstrated economic viability. Environmental, permitting, legal, title, taxation,
socio-political, marketing, or other relevant issues may materially affect the estimate of mineral resources. The quantity and grade of reported Inferred
Mineral Resources in this estimate are uncertain in nature and there has been insufficient exploration to define these Inferred Mineral Resources as Indicated
or Measured Mineral Resources and it is uncertain if further exploration will result in upgrading them to the Indicated or Measured Mineral Resource
categories
13
Port-Cartier layout
ArcelorMittal
Potential Laydown area
Town of Port-Cartier
Municipal Wharf
14
Lamêlée PEA Highlights
•
Net Present Value ("NPV")
at 8% discount rate
•
Internal Rate of Return ("IRR")
•
Pre-tax payback (years from production start-up)
5.8 years
•
Initial project Capex
$816.7 M
•
Total average operating cost
•
Conservative long-term price assumptions
•
Minelife of 20 years at 5 million tonnes per annum ("Mtpy") of iron concentrate
•
Accuracy of the estimate
$529.9 M (pre-tax)
$243.8 M (post-tax)
15.4% (pre-tax)
12.1 % (post-tax)
$54.81/tonne of concentrate
US$ 79.50/tonne, FOB Sept-Îles
-15% + 30%
15
Operating Costs Summary
OPERATING COSTS
$/tonne of Concentrate
Mine
21.92
Concentrator
8.24
General and administration
7.04
Logistic
17.61
Total
54.81
16
The Concentrate
PRELIMINARY IRON CONCENTRATE
SPECIFICATIONS
Value in use of the Lamêlée high
quality concentrate
•
•
•
•
High Fe content
Magnetite Content
Very low Phosphorus, Alumina and
Titanium impurities
Low Loss on Ignition
Benefits for our customers
•
•
•
Reduced operating costs: Lowers fuel
consumption for sintering, improves
blast furnaces efficiency and reduces
greenhouse gas emissions.
Improve overall operation of the blast
furnaces : Lowers the slag and protects
tuyeres.
Allows steel mills to use more ore with
high impurities ( China domestic, Brazil
and Australia) in the blast furnace mix.
17
Lamêlée High Quality Concentrate
TYPICAL VALUE
China
Domestic
1
Fe%
64.8
63.8
P%
0.025
0.049
0.020 0.043 0.090 0.020
0.90
0.90
1.20
AL₂O₃%
Brazil
2
Australia
1
2
65.0 57.7 61.5
1.45 2.25
Canada
1
66.0
0.20
Lamêlée
64.3
<0.010
0.38
18
Milestone
ANTICIPATED COST
STEP II
2015
• ENVIRONMENTAL BASE LINE STUDY AND PERMITTING
$1M
• HYDROGEOLOGICAL AND GEOTECHNICAL STUDIES
$1.5M
• UPDATED NI 43-101 MINERAL RESOURCES
$250K
• DETAIL METALLURGICAL TEST-WORK
$1.0M
• BANKABLE FEASIBILITY
$2,75M
• G&A
$1.5M
TOTAL
$8.0M
19
Milestone and Road Map for Lamêlée Iron Ore
Project (updated January, 2015)
Q1
2014
Q2 Q3
Q4
Q1
2015
Q2 Q3
Q4
Q1
2016
Q2 Q3
Q4
Q1
2017
Q2 Q3
2018
Q4 Q1
MILESTONES
STEP I
Metallurgical Test-work /Bulk Sampling
COMPLETED
Scoping Study (PEA)
Financing
COMPLETED
$2M DONE IN JULY
STEP II
Environmental Base line Study / Permitting
Hydrogeological and Geotechnical Studies
Drilling / Updated Ni 43-101 Mineral Resources
4750m COMPLETED IN OCTOBER 2014
Detail Metallurgical Test-Work
Bankable Feasibility Study (BFS)
STEP III
Construction / Mine Pre-Production
Commercial Production
20
Key Milestones Achieved
• March 2015 Agreement with Duro Felguera, to realize, at their cost, part of the total
works required to deliver a BFS ( up to $1M) .
• November 25th, 2014 Completed Preliminary Economic assessment(PEA) offering
very promising results.
• November 2014 Completion of a drill work program.
• October 2014 Memorandum of understanding with Logistec and Flexiport, pertaining
to ore handling yard and ship loading operations.
• October 2014 Memorandum of understanding with Canada Steamship Lines (CSL),
related to transhipping activities.
• July 2014 completed $2M financing by prospectus offering.
• June 2014 Letter of Interest with the city of Port-Cartier, giving access to land and
wharf, to allow construction of project infrastructures and port operations.
21
• May 2014 Agreement Governing Certain Investor Rights and Obligations with
Fancamp Exploration Ltd.
Financing requirement
• $2M done in Q2 2014 to complete STEP I, including
additional drilling needed to complete the BFS.
• $6M-$10M required to complete STEP II in 2015.
22
Conclusion
• This is a very good deposit
• This team has a proven track record
• This project is strategically well located close to electrical
grid, water, road and railroad
• Could be in production within 4 years
• Low CAPEX
• Reasonable and achievable OPEX
THIS IS THE MOST PROMISING IRON ORE PROJECT
IN THE LABRADOR TROUGH
23
CONTACT INFORMATION
Hubert Vallee, ing.
President & CEO
(514)793-7153
[email protected]
Marc Duchesne, CPA
Chief Financial Officer
[email protected]
24
APPENDIX
25
Board of Directors
• Pierre Lortie, Chairman of the Board
Mr. Lortie is Senior Business Advisor at the law firm Dentons Canada S.E.N.C.R.L., since May 2006.
He is a Director of Element Financial Corporation, and of Canam Group Inc. and Quest Rare Minerals
Inc.,all listed on the TSX. Mr. Lortie was a director of Arianne Resources and also of Consolidated
Thompson Iron Mines Ltd. Mr. Lortie served as President of the Transition Committee of the
Agglomeration of Montreal from its inception in June 2004 to the end of its mandate in December
2005. At Bombardier Inc., Mr. Lortie served as President and Chief Operating Officer of their
Transportation, Capital, International and Regional Aircraft groups until December 2003. He has also
served as Chairman of Canada's Royal Commission on Electoral Reform and Party Financing. He has
been Chairman of the Board, President and Chief Executive Officer of Provigo Inc., President and
Chief Executive Officer of the Montreal Stock Exchange and a Senior Partner of Secor Inc. Mr. Lortie
received a Master of Business Administration degree with honours from the University of Chicago, a
license in applied economics from the Université catholique de Louvain, Belgium, and a Bachelor's
degree in applied sciences (engineering physics) from Université Laval, Canada. He received his
certification from the Institute of Corporate Directors (ICD.D). Mr. Lortie is a Fellow and President of
the Canadian Academy of Engineering. He was awarded the Order of Canada in 2001.
• Jean Depatie, Director
Mr. Depatie has over 35 years of national and international experience in economic geology, having
acted, directly or indirectly, as consultant for organizations such as the United Nations, the World
Bank, the Asian Development Bank, the Commonwealth Agency and the Québec Ministry of Natural
Resources. In addition to being a past director of Glamis Gold Ltd. (now Goldcorp Inc.) and Novicourt
Inc. (now Xstrata plc), Mr. Depatie was instrumental in the development of Consolidated Thompson
through his six-year tenure as a director. Mr. Depatie has also served as officer and/or director to a
number of other companies listed on US and Canadian stock exchanges. Mr. Depatie is a former
president of the Québec Professional Association of Geologists and Geophysicists (1980-81). Mr.
Depatie is an economic geologist with a BA in math and physics, and holds both bachelor and master
degrees in geology. He received an award of excellence in 1990 from the Québec Department of
Energy and Resources.
26
Board of Directors
• André La Flèche , Director
Mr. La Flèche, was until his recent retirement in December 2013, Vice-President, Development, at ArcelorMittal
Mines (Canada), since 2011. He was also a member of the Board of Directors of the business unit since April
2009. From 2004 to 2009, Mr. La Flèche was Vice-President, Finance and CFO, and assumed on an interim basis
the position of company Secretary. As Vice-President, Development, he led all of ArcelorMittal Mines Canada’s
projects under development, which encompassed acquisitions, expansions and others. Mr. La Flèche was a
Financial Mining Consultant for a number of major companies on the national and international sides, prior to
working for ArcelorMittal Mines Canada. These included VP Finance and Administration for Alcan, Alcoa,
Alstom and Cooper & Lybrand in Canada and abroad. He is member of the Canadian Institute of Chartered
Accountants (CICA) and the Order of Professional Chartered Accountants of Quebec. He is a graduate in
Administration and Affairs from McGill and Concordia universities.
• Peter H. Smith, Director
Mr. Peter H. Smith, PhD, P.Eng is a director and a founder of Fancamp. He is Chairman of the Board, President
and CEO. He is a Consulting Geologist and has over many years been a consultant to other mining exploration
firms in North and South America, Europe and Africa. Mr. Smith is currently a director and President of The
Magpie Mines Inc. Mr. Smith has been a director of Fancamp since January 1986. He served as a director of
Argex Titanium Inc. from October 2009 to May 2013 and was a member of the audit committee. Argex is
engaged principally in the development of a TiO2 pigment production plant. He served as a director of
Litewave Corp. since January 2010. Mr. Smith served as a director of St Georges Platinum and Base Metals Ltd.
until October 2010 and served as a director of Golden Hope Mines Limited from May 1997 to August 2009.
Mr. Smith has been a director of Uragold Bay Resources Inc. since September 2014. He was also formerly with
AMAX Exploration Ltd., Falconbridge Nickel Mines Ltd. and Geological Survey of Canada. Mr. Smith is a Member
of the Ontario Order of Professional Engineers and was a director of The Prospectors and Developers
Association of Canada from 1998 to 2010. He remains a member of the Aboriginal Affairs Committee of the
PDAC.
27
Senior Management
• Hubert Vallée, President & CEO and Director
Mr. Vallée graduated from Laval University. He has been a leader in the mining industry for 28 years.
He joined Quebec Cartier Mining as Project Engineer and was promoted to Director of Operations for
its Pellet Plant in 2001. He managed the Iron Ore Company of Canada’s Pellet Plant in Sept-Iles before
joining Domtar Inc. as CEO of its pulp mill in Lebel-sur-Quévillon . He joined Consolidated Thompson in
2006 and was one of the key people who made this project happen. After the sale of Consolidated
Thompson Cliffs, Mr. Vallée acted as VP Project Development for Phase II of Bloom Lake operation . He
has also been involved as Senior Vice President, Project Development, at Century Iron Mines. Mr. Vallée
is known for its superior abilities to bring projects on stream cost-effectively through design innovation
and management processes, maintaining relationships with stakeholders.
• Marc Duchesne, CFO
Mr. Duchesne is CPA and has over 25 years of senior financial and management experience with major
Quebec-based companies, most recently as Senior Vice President of Finance for Consolidated
Thompson Iron Mines Inc., located in the Labrador Trough in Quebec, which was acquired by Cliffs
Natural Resources Inc.. Mr. Duchesne joined Consolidated Thompson in 2006 and actively participated
in all phases of its growth. In addition to overseeing financial reporting, controllership and budget
planning duties, Mr. Duchesne directed and supervised project capital expenditures during the crucial
mine development phase, and additionally, he and the Consolidated Thompson team raised over $850
million in financing, negotiated and concluded a $240 million strategic investment by Wuhan Iron and
Steel Company ("WISCO"), one of China's largest steel producers, as well as off-take agreements with
WISCO, Worldlink Resources of China and SK Networks Co., a subsidiary of the third largest Korean
conglomerate, SK Group.
28
Senior Management
• Pascal Vallée, Vice-President Project development and Logistics
Mr. Vallée is an Executive project manager with over 19 years of experience in the mining industry,
including 5 years of major project management in iron ore as Project Coordinator for Consolidated
Thompson (Bloom Lake project) and as Expansion General Manager for Cliffs Natural Resources. Recently
he was working as Engineering Project Manager on a phosphate feasibility study. During his career he
worked also as General Foreman for Xstrata Nickel – Raglan Mine in the beneficiation plant, Metso Minerals
as Life Cycle Services Project Manager and as Maintenance Engineer for Quebec Cartier Mining (Arcelor
Mittal). He develops specific skill as engineering manager, construction project development and
management in green and brown field for mining industry.
• Ghislain Arel, Vice-President Mining Development and Environment
Mr. Arel have an extensive experience in mining operation (20 years), mining engineering and also in
mining development for Green, Brown or existing project. Recently Mr. Arel has been involved with Century
Iron Mines Corporation to develop 3 iron ore project and led 3 preliminary studies on their properties
(Duncan Lake, Joyce Lake and Sunny Lake). Previously he was a strong and key player for Consolidated
Thompson (Bloom Lake project). He was involved at the early stage as Project Manager and after as Mine
Manager and Assistant General Manager (mine and treatment plant). In this career, he has taken the role
as Chief Mining Engineer of Mining Operation for Quebec Iron and Titanium (subsidiary of Rio Tinto) and
McWatters mining Company and consecutively the position as Director of the mining sector for service firm
(Genivar Inc.).
29