Duncan Lake Project

The Duncan Lake Project is in the James Bay region of Quebec and hosts an iron magnetite deposit. A preliminary economic assessment was issued in May, 2013 and was published on SEDAR.

Project Summary

Project Facts
Location	James Bay region, Quebec, 40km S of Radisson
Mineral Resources (Oct. 11, 2012)
Deposit Type	Magnetite
Measured & Indicated	1.05 billion tonnes (24.42% TFe)
Inferred	0.56 billion tonnes (24.69% TFe)
Preliminary Economic Assessment (May 6, 2013)
Pre-tax NPV	C$4,144.1 million at 8% discount rate
Post-tax NPV	C$2,238.4 million at 8% discount rate
Pre-tax IRR	20.1%
Post-tax IRR	15.5%
Pre-tax Payback	4.8 years
Post-tax Payback	5.2 years
Project CAPEX	C$3,880.9 million
Project OPEX	C$59.17/tonne pellets
Life of Mine	20 years

 

Technical Report

May 6, 2013

NI 43-101 Technical Report, Preliminary Economic Assessment of the Duncan Lake Iron Property, James Bay, Québec – Canada, by MET-CHEM. Canada Inc.

Property Description and Ownership

The Duncan Lake iron property is located approximately 50 kilometres south of Radisson, Quebec. Hydroelectric power lines are located very close to the property.

The property is subdivided into six blocks (Deposits 1 to 6), elongated southwest to northeast on a 28-kilometre strike. A paved highway, Highway 109, goes through the property and splits it in two. Deposits 1, 2 and 5 are located on the west side of the road and the other deposits on the eastern side.

The Duncan Lake Project is comprised of 107 contiguous mining claims covering ~5034 hectares in the James Bay region (February 2021). An elongate rectangular tract of land controlled by Hydro-Québec truncates the claims along the centre of most of the length of the property. All the claims were acquired as map-designated claims. Through a wholly-owned subsidiary, Century has a 68% registered interest in the project.

Local Resources and Infrastructure

Radisson is the closest municipality to the Duncan Lake Project and was founded in 1974 to provide housing and to support development of the La Grande hydroelectric complex. Services such as accommodation, hospital, car rental agencies, helicopter or float planes chartering and contractors with heavy machinery can be found in Radisson.

La Grande Rivière Airport is used to shuttle Hydro-Québec personnel between Radisson and the larger cities in Québec, but it is also served by daily scheduled flights. Two power lines skirt the edge of Block 3 and cross the corner of Block 2 of the Duncan Lake Project. Water supply is abundant, considering all the lakes within or adjacent to the property.

Geology and Mineralization

The property lies within the western part of the La Grande Sub-Province of the structural Superior Province. The La Grande Sub-Province is characterized by an Archean tonalitic basement (Langelier Complex) unconformably overlain by the volcano sedimentary Guyer and Yasinski Groups composed of iron formation, wacke, paragneiss, basalt to dacite and pyroclastic units.

The Banded Iron Formation (“BIF”) at Duncan Lake shares features characteristic of both the Superior Lake and Algoma types of iron formations. The Duncan Lake property is underlain by two parallel N-NE BIF units traced across the entire property by their magnetic signature and by drilling. The iron formations are of typical BIF type with alternating 1 to 10 millimetres magnetite and silica beds.

Iron mineralization within the Duncan Lake property consists of thin alternating beds of silica (quartz, chert) and iron oxides (magnetite and hematite), with variable amounts of silicate, carbonate and sulphides. The sequences are commonly metamorphosed. Grain size varies according to the degree of metamorphism and iron amphiboles are commonly developed in middle green schist or higher metamorphic grade rocks. On average, the iron mineralization at Duncan Lake property contains 15% to 35% total Fe and very low levels of deleterious elements, except for elevated average sulphur content that probably originates from widespread pyrite disseminations.

BIF units are observed at various levels within the sequence of altered mafic volcanic and volcano-clastic rocks. Three types of BIF are observed:

• Oxide BIF composed of magnetite-rich bands alternating with quartz-rich bands.
• Silicate BIF composed of magnetite-rich bands alternating with iron silicate bands including chlorite, actinolite, diopside, and hornblende as well as free silica and biotite.
• Lean BIF or low-grade iron units associated with greywacke. The lean BIF commonly contains silicate minerals and magnetite bands or disseminations.

Metallurgical Testing

Six holes totalling 2,349 metres of HQ core were drilled in 2011 to provide material for metallurgical testwork.

Preliminary metallurgical and Davis Tube tests show the iron mineralization of the Duncan Lake property is composed mostly of magnetite and contains very low levels of deleterious elements, except for elevated sulphur. Sulphur seems to report to the tails in the Davis Tube tests and its acid-generating potential is under study.

Mineral Resource Estimate

The mineral resource estimate for Duncan Lake used 9,178 assays collected from 54,467 metres of drilling in 177 drill holes. The estimate also rested on a total of 843 Davis Tube Samples.

The estimation was performed using 3D software MineSightTM and the block modeling approach was used. All work was performed under the supervision of the qualified persons. The resource classification follows the guidelines adopted by the Council of the Canadian Institute of Mining Metallurgy and Petroleum (“CIM”) through the NI 43-101 standards and guidelines. The criteria used by Met-Chem classifying the estimated resources are based on certainty and continuity of geology and grades.

The Mineral Resource Statement is made using a cut-off of 16% head Fe. This cut-off has been determined to be appropriate at this stage of the project. In the 2010 resource estimation 3 cut-offs, 16% Fe, 18% Fe and 20% Fe, were selected to simulate tonnage and grade variation. Results show slow variation in tonnage and grade.

Production Plan

The PEA is based on the production of 12 Mtpy of acid pellets (66.3% Fe, 5.1% SiO2) year-round from Duncan Lake deposits 3 and 4, as more fully described in the news release dated August 27, 2012. Mined resources will be transported to the concentrator located near Deposit 3. Concentrate will be pumped from the concentrator 135 kilometres by pipeline to the pellet plant close to the town of Chisasibi on the shore of James Bay, near Stromness Island. Pellets will be stored close to the pellet plant and the Duncan Lake dedicated port, and then shipped to ports in Europe and China, during the four-month ice-free period. The project is planned as a mixed local and fly-in/fly-out operation, with camps in Radisson and at the proposed pellet and port facilities near Chisasibi.

Mining

In-pit resources were estimated from the optimal economic pits that were defined using the operating cost and sales prices (defined below) and based on the August 2012 Met-Chem resource models. The in-pit resources include measured, indicated and inferred resource categories. A total of 800 million tonnes of resources will be mined over a 20-year period from deposits 3 and 4, using 400 short ton haul trucks and 37 m³ hydraulic excavators. Other mining highlights include:

• Average annual resource production, 41 million tonnes grading 24.8% TFe
• Average stripping ratio, 1.8:1 (1.3:1 for the first five years)
• Average open pit haulage distance, 4.0 kilometres to crusher, 3.8 kilometres to waste stockpiles

Concentrating

The Duncan Lake concentrator will be located adjacent to Deposit 3. Mined mineralized material will be crushed using gyratory crushers before being conveyed to three concentrator process lines. Each process line will consist of:

• SAG Mill grinding circuit
• Cobber magnetic separators
• Secondary grinding stage using two (2) ball mills per line operating in a closed loop with cyclones
• Magnetic separators (cleaner/finisher magnetic separators)

Concentrate will be thickened to 65% solids prior to pumping to the pellet plant. Tailings are also thickened before being pumped to the tailings ponds. Final concentrate will grade 67.6% Fe and 5% SiO2.

Capital Cost Summary

Operating Cost Summary