Cyclone Metals Ltd (ASX:CLE) has gained 100% ownership of the Block 103 Magnetite Iron Ore Project in the heart of the world-class Labrador Trough iron belt in Quebec, Canada, through the acquisition of Labrador Iron Pty Ltd.
Block 103 covers 7,275 hectares and is the largest undeveloped magnetite iron ore project in the world, with a historical mineral resource estimate (MRE) of 7,200 million tonnes at 29.2% iron, classified as inferred according to the Canadian NI 43-101.
The Labrador Trough is one of the largest iron ore belts in the world and accounts for 99% of Canada's iron ore.
Valued at US$23 billion in 2021, the global magnetite iron ore market is expected to expand at a compounded annual growth rate of 5.43% from 2022 to reach US$31.6 billion in 2027.
Block 103 location map.
Tremendous potential
“We are very pleased to announce the acquisition of such a high-potential magnetite iron ore project in close proximity to other major iron ore producers and developers in a world-class mining province and a Tier 1 jurisdiction of Newfoundland and Labrador, Canada,” Cyclone executive director Tony Sage said.
“The strategic geographical position of Block 103 with established infrastructure, services and transport corridors, greatly supports the development potential of the asset.
“The presence of neighbouring mines run by Tier 1 producers including Tata Steel, likewise, offer many future operational opportunities for Cyclone.
“The acquisition positions Cyclone in comparison to other major iron ore players on the ASX and other exchanges.
“The green transition and global targets towards net-zero carbon emission have made magnetite ore more desirable as it will be pivotal in emissions reduction for the iron ore and steel industries.
“We see tremendous potential for Block 103 to become a crucial piece of the iron ore supply worldwide whilst promoting the reduction of carbon emissions in the steel industry.”
Map including nearby deposits.
Key terms
No stranger in the global resources sector, Sage has a reputation for turning long-term trends into short-term results.
His flagship Cape Lambert Resources Ltd, founded in 2001, is a prime example of turning an iron ore-focused company into one with multiple mineral resource operations in developing countries.
In 2008, he sold the Mt Anketell magnetite project to a Chinese corporation for $400 million after buying it for just $20 million two years earlier.
For the Block 103 deal, Sage has CLE proposing to issue to the shareholders of Labrador a total of 2.16 billion shares at $0.0025 each.
Completion of the transaction is conditional upon the company receiving all customary and necessary regulatory approvals and CLE being satisfied that the share issue will also satisfy Labrador’s outstanding payment obligations to M3 Metals Corp (TSX-V:MT).
Block 103 historic drill core.
It is also conditional upon CLE completing a capital raising of no less than $1 million and up to $2 million, subject to shareholder approval, to fund initial work on the project, the cost of the transaction as well as for general working capital.
Historically-speaking
Block 103 comprises two zones of mineralisation: the Northwest Zone and the Greenbush Zone.
Some 115 holes aggregating 28,021 metres have been drilled so far, mostly to explore and extend the Greenbush Zone.
Block 103 helipad.
A 2012 program was focused on this area and comprised 72 drill holes aggregating 22,359 metres.
Drilling was completed along grid lines which were 500 to 600 metres apart and covered an approximate northwest-southeast strike length of 4 by 2.5 kilometres, testing mineralisation to a vertical depth of 450 metres.
The Greenbush Zone’s historical MRE of 7.2 billion tonnes at 29.2 iron was based on results from 81 diamond drill holes totalling 23,735 metres along a 4,000-metre strike length at the north-central portion of the project.
CLE has interests in several exploration and mining projects and companies, providing exposure to copper, gold, iron ore, lithium, rare earths, uranium and lead-silver-zinc assets in Australia, Europe, Africa and South America.