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Oceanic Iron Ore Corp.

TSXV:FEOLive AI agent

Oceanic Iron Ore Corp.

Investor website: https://www.oceanicironore.com/

About

Oceanic Iron Ore Corp. is committed to responsible development in the mining sector, emphasizing partnerships with the Inuit of Nunavik, the Québec government, and stakeholders while respecting the culture and environment of the North. The leadership team consists of experienced mining executives and financiers who have successfully developed and operated major projects globally.

Verified company data

Cash position
$2,919,868
Shares outstanding
261,510,756
Fully diluted shares
365,439,774
Mineral resource
The Hopes Advance iron deposits comprise a total of 10 mineral deposits. These deposits are a typical stratigraphic iron deposit similar to other Labrador Trough iron deposits of Lake Superior-type iron formations, located at the northern end of the Labrador Trough. The Hopes Advance iron formations are thick Sokoman Iron Formation, with magnetite, magnetite and hematite units that strike east-west to northeast and have gentle dips to the south and southeast. The iron formations are typically 40–70 m thick, and often crop out at surface. The three largest deposits are the Castle Mountain, Bay Zone F and Iron Valley deposits. Mineral Resources that were estimated assuming open pit mining methods in 2012 were reviewed in 2019 to determine if they were still current. These reviews included checks on the confidence classification assignments based on changes to defined terms between the 2010 and 2014 editions of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves, inputs into the Whittle optimisation shells that constrain the estimate, and commodity price assumptions as a result of the 2019 VIU Study. Eddy Canova, P. Geo, a consultant to the Company concluded that the estimates remain current, and have an effective date of 20 November, 2019, which is the date the reviews were completed. Mineral Resources were estimated for the Bay Zone B, C, D, E, F, Castle Mountain, Iron Valley, West Zone 2, West Zone 4 and West Macdonald deposits, and are totalled in Table 3.
Projects
["Ungava Bay Iron Deposits: Overview Oceanic is focused on the development of the Ungava Bay iron properties. These properties comprise more than 3,000 claims over three project areas, namely Hopes Advance, Morgan Lake and Roberts Lake, which are located over approximately 1,500 km2 along the northern extension of the Labrador Trough in the Nunavik Region of northern Quebec. The projects cover over 300 kilometres of iron formation and all the deposits are located within 20 – 50 km of tidewater. All three project areas have been explored historically in the 1950's and 1960's, including sampling, drilling and metallurgical work to support the planning and development of iron mines. In December 2019, the Company reported the results of an updated NI 43-101 compliant Preliminary Economic Assessment at Hopes Advance. Hopes Advance Project: 2019 PEA Overview In December 2019, the Company reported the results of an updated NI 43-101 compliant Preliminary Economic Assessment at Hopes Advance prepared by BBA Engineering Ltd. (“BBA”) in respect of the Company’s Hopes Advance Project (the “Project”). A Pre-Feasibility Study was completed on the Project in 2012 (“2012 PFS”). The Company is not treating the economic results of the 2012 PFS or the related Mineral Reserve estimates as current. However, some of the scientific and technical information generated during the 2012 PFS is used as a basis for the Study. The objective of the PEA was to rescope the Project profile and production scale using Measured and Indicated Mineral Resources estimated within three of the 10 defined deposits in order to reduce the up-front capital required to bring the Project to commercial production. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Key differences in this Study compared to the 2012 PFS include the following: - Significantly lower initial capital expenditure - Reduced production scale to accommodate the aforementioned lower capital expenditure - Seasonal shipping of concentrate versus year-round shipping in the 2012 PFS, reducing Port infrastructure capital costs and eliminating winter shipping risks - Construction of a more cost-effective module based barge-mounted power plant versus a land based plant and reliance on Hydro Quebec connections in the 2012 PFS. Although the Company is not reliant on third party infrastructure, there exists the potential for future power operating cost savings in the event a transmission line connection is established with Hydro Québec - Base case FOB selling price of USD $82/t, versus US $100/t in the 2012 PFS - The assumed exchange rate used in the current Study was US $0.75 = CAD$1.00, versus a US $1.00 = CAD $1.00 exchange rate in the 2012 PFS. The results of the Study attribute significant value to the Project and present a significant reduction in initial capital expenditure requirements, all while achieving the same post tax IRR as the 2012 PFS. Importantly, the Project achieves an NPV / Initial Capex Ratio of 1.18, which is rare for bulk/base metal projects where capital requirements are typically very high. Additional Attributes of the Project: - Project implementation and development schedule independent of third-party infrastructure, including extension to the Hydro Québec grid north to the Project - Construction and operations to utilize barge-mounted self-generated power; - Low operating cost per tonne resulting from “no rail” advantage, simple metallurgy and low strip ratio (0.81:1 over life of mine) - Pilot plant metallurgical test work conducted as part of the 2012 PFS, confirms product quality suitable for pellet or sinter feed - 66.6% Fe grade concentrate with low deleterious elements and silica content ≤ 4.5% - High weight and Fe recoveries using a relatively simple flow sheet. The Study The Study was led by the Montreal office of BBA, a Canadian consulting engineering firm with over 900 employees, who have extensive experience with iron ore projects, particularly in the Labrador Trough. Working alongside BBA was Wood (formerly, AMEC Foster Wheeler), who worked with the Company on Port related infrastructure in the Company’s previous studies. The Company presents two cases as part of the Study with the only variable between the cases being the FOB selling price. The Base Case assumes an FOB selling price of approximately USD $82/t (approximately US $105/t CFR). The alternate case presents the economics of the Project using a spot price of approximately USD $89/t FOB (November 22nd 2019). In both cases, the Study is based on initial production of approximately 5 million tonnes per annum of dry concentrate followed by an expansion in year 5 to approximately 10 million tonnes per annum. The financial analysis for the Study is limited to a 28-year mine life and considers only 3 of the 10 deposits for which mineral resources have been estimated. The Company believes that the remaining resources could support continued operations well beyond 28 years. The 28‑year mine plan for the Study is based on mining the Castle Mountain, Iron Valley and Bay Zone F deposits whereas the 2012 PFS considered mining all 10 of the Hopes Advance deposits at an initial concentrate production rate of 10 Mtpa with an expansion to 20 Mtpa in year 11 over a 30 year mine life. For both initial and expansion phases of the Study, power is self-generated using diesel fuel. Concentrate is filtered at the concentrator site and transported year-round by truck to a port stockpile where it is shipped only during summer months. Such seasonal shipping results in reduced port installation costs and the avoidance of having to use higher cost ice class vessels during the winter. For the Study, BBA is proposing a modified process flowsheet which is more energy efficient, aimed at reducing power requirements and expected to improve the Project’s carbon footprint compared to the initial phase in the 2012 PFS which required significantly more electric power which was generated using heavy fuel oil. Updated Value in Use Study Reaffirms Product Desirability of Hopes Advance Product In 2013, the Company commissioned and received a Product Value in Use Marketing Study (“2013 VIU Study”) from Vulcantech Technologies. The 2013 VIU Study concluded that, in addition to the iron unit premium for the high grade Hopes Advance product at 66.6% Fe measured against the 62% Fe benchmark, the low impurities associated with the Hopes Advance product could attract an additional quality premium for steel producers in China, Korea, Japan, and Taiwan. In 2019, the Company commissioned Vulcantech Technologies to update its VIU study (the “2019 VIU Study”) in order to obtain current market data as to the potential pricing and demand for Hopes Advance Iron Ore. The 2019 VIU Study concludes that: - Recent environmental restrictions placed by Chinese Central and Provincial Governments are likely to lead to more support for higher grade iron ores as steel mills try to maximize steel production and minimize pollution, driven by chemical inputs used in removing deleterious elements from iron ore - 65% Fe index ores are expected to obtain a 15-30% premium per Fe unit over the 62% Fe benchmark prices - The quality premium over and above the 65% Fe index ores has been reduced to approximately 5% - Due to the above, improved pricing compared to the base case pricing used for the Study would be expected given the low phosphorus and alumina content of the Hopes Advance material - While the 2019 VIU Study focuses on Chinese demand, steel producers in China, Korea, Japan, Taiwan and Europe could still benefit considerably from the product’s low impurity chemistry. Hopes Advance’s Competitive Cost Profile Compared to Industry Producers The Base Case FOB Price of US $82.14 and shipping costs of US $22.83/t (to Qingdao, China), results in a CFR price of US $104.97/t. In comparing the Hopes Advance product economics to that of producers, it is important to factor in the premium applied in the pricing of the Hopes Advance product to other iron ore products. By way of example, by using the implied premium of the Hopes Advance product to product from the Pilbara region of Australia as a reduction or credit to the operating cost at Hopes Advance, a more meaningful and appropriate operating cost comparison per tonne of product shipped is achieved. Metallurgical Testwork and Process Flowsheet Metallurgical testwork consisted of bench scale tests as well as a pilot test program. Generally, the results of the testwork indicated the following characteristics for the mineralized material tested: - It is relatively soft - It can be processed with a simple and conventional flow sheet - A concentrate with low SiO2 and low deleterious elements can be produced The conceptual flowsheet and plant design proposed in the Study are based on the following: - Testwork performed during the 2012 PFS. - A comminution circuit based on HPGR grinding technology. - The use of a three-stage spiral circuit for gravity concentration, as in the 2012 PFS. - A scaled version of the magnetic concentrator plant from the 2012 PFS, substituting the Ball Mill with more energy efficient Verti-Mills. - Flowsheet improvements, plant design and general layouts based on BBA’s experience on other similar projects. - Concentrate trucking to the port removing the requirement of regrinding the hematite concentrate and construction of a pipeline. A simplified mineral processing flowsheet is shown in Figures 1 and 2. A description of the proposed process is set out below: - Run of mine mill feed material is crushed in two stages prior to being stockpiled; - Crushed mill feed material will be is reclaimed and undergoes a size reduction to a P80 of 140µm via HPGR and ball milling; - The material is then pumped to a gravity recovery circuit which produces a final hematite concentrate and a gravity tail; - The gravity tails are pumped to magnetic separation wherein the magnetic portion is recovered and sent to filtration along with the hematite concentrate; - The tailings from magnetic separation are thickened and pumped to a tailings pond; - The filtered concentrate is stockpiled to be loaded year-round into trucks which transport the concentrate to a stock yard where a stacker-reclaimer system will place the material into a storage stockpile to be shipped during the summer season;"]
Leadership
Steven Dean (Chairman and Director, Fellow of the Australian Institute of Mining and Metallurgy with extensive international mining experience, including as President of Teck Cominco Limited and founder of Atlantic Gold Corporation.), Chris Batalha (Chief Executive Officer and Director, Seasoned mining executive with nearly 20 years of experience in accounting, corporate governance, and M&A, previously CFO of Atlantic and Artemis.), Ashley Kates (Chief Financial Officer & Corporate Secretary, Accomplished finance executive with nearly 20 years in the mining industry, expertise in financial reporting and corporate governance.), Eddy Canova (Director of Exploration, Over 25 years of experience in mineral exploration and production, focused on gold and iron ore industries.), Gordon Keep (Director, Extensive experience in investment banking and public natural resource companies, currently CEO of Fiore Management & Advisory Corp.), The Hon. John Reynolds, P.C. (Director, Experienced in venture capital and resource sector development, former Member of Parliament.), Jeremy Langford (Director, Internationally recognized mining executive with over 20 years of experience in large-scale mining projects, currently President of Artemis Gold Inc.)

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