Joyce Lake DSO Project

Joyce Lake DSO Iron Ore Project is Century’s most advanced project. In April 2015 the Joyce Lake Project Feasibility Study was published on SEDAR. An environmental impact study is also underway.

Project Summary

• Open pit mining with dry crushing and screening producing 65% of products as sinter fines and 35% as lump;
• Production at nominal 2.5 million tonnes per annum over a 7 year life of mine with initial 5 years at an ore grade of 61.4% Fe from the pit and remaining life of mine from stockpiles at 53.3% Fe;
• Product transport from the mine over a new 43 km haul road to a new rail loop connecting to the existing rail, for railing to the Iron Ore Company of Canada Port Terminal in Sept-Iles for subsequent shipment to China;

Project Facts (Apr 14, 2015)
Location	~20km NE Schefferville
Mineral Resources (50% Fe Cut-off)
Deposit Type	DSO
Measured & Indicated	24.3 million tonnes
Inferred	0.84 million tonnes
Feasibility Study
Pre-tax NPV	C$130.8 million at 8% discount rate
Post-tax NPV	C$61.4 million at 8% discount rate
Pre-tax IRR	18.71%
Post-tax IRR	13.68%
Pre-tax payback	4.4 years
Initial Project CAPEX	C$259.6 million
Average Project OPEX	C$58.25/dmt (FOB)
Life of Mine	Approximately 7 years
Strip Ratio	4.09:1

Mineral Resources and Reserves

The mineral resources and mineral reserves are reported in accordance with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) definition standards for Mineral Resources, Mineral Reserves and their Guidelines, and are compliant with NI 43-101.

Technical Report

The Joyce Lake Feasibility Study, Technical Report by BBA, can be found on SEDAR.

Property Description and Ownership

The Attikamagen Property, which includes both the Joyce Lake DSO deposit and the Hayot Lake deposit, is located approximately 20 kilometres northeast of Schefferville, Québec. The property includes 135 designated claims located in Québec and 682 claims located in Labrador, covering an aggregated area of approximately 23,667.6 hectares. The mineral rights exclude surface rights and were acquired by staking. All claims are located on Crown lands.

The Joyce Lake DSO Project is comprised of 6 mineral licences located in Newfoundland and Labrador, which includes a total of 682 claims covering a total area of 17,050 hectares (as of February 2021). The project is 100% owned by Century.

Location, Access and Infrastructure

The Joyce Lake DSO Project is located in the western part of the Labrador Trough iron range, about 1,200 kilometres northeast of Montréal and 20 kilometres northeast of the town of Schefferville. There are no roads connecting Schefferville to western Labrador or elsewhere in Québec. Access is by rail from Sept-Îles or by air from several cities.

The Joyce Lake project is located on a peninsula in Attikamagen Lake directly across Iron Arm Inlet from the Joint Venture Iron Arm  exploration camp which is accessible by dirt road from Schefferville. The Joyce Lake project is only accessible by boat or float plane in  summer or over the ice from Iron Arm camp in winter.

The modern airport at Schefferville has a 2,000-metre paved runway and navigational aids for passenger jet aircraft. Air service is available three times per week from Wabush, Labrador, with less frequent service to Montréal and Québec City, via Sept-Îles.

The existing rail network that connects Schefferville to the Port of Sept-Îles consists of two sections: the northern section of railway from Schefferville to Emeril Junction (~205km) is owned by Tshiuetin Railway, and the southern section from Emeril Junction to the Port of Sept-Îles is owned by QNS&L Railway (~360km).

Background Geology

The Iron Arm-Attikamagen Lake area is located northeast of Schefferville, Quebec, and is part of the much larger area which includes the Schefferville Mining District. The underlying rocks in the area form the western, miogeosynclinal part of the Labrador Trough in the Churchill Province of the Canadian Shield. These rocks are mainly sedimentary strata of early Proterozoic (Aphebian) age.

Field mapping indicates that the fold structure at Joyce Lake is trending NW-SE. There are zones of minimal strain and the units appear undeformed. These low strain zones are of particular interest because they would represent unshortened and therefore thicker iron beds outside of the fold nose. It was observed in the field, especially from the massive hematite units on one limb of the fold structure, that there were specularite and hematite veinlets and tension gashes (1-3 millimetres) oriented obliquely to the strike of the perceived bedding. These brittle features likely helped to accommodate the volume change during shortening and thus the shortening to be oriented along a strike of NE-SW.

The Ruth shale provides an impermeable layer at depth to cap the down flow of meteoric water and therefore encourage leaching of silica and the deposition of enriched hematite as DSO. This is expected to be greatest where there is the greatest brittle deformation and would carry the greater tonnage where the massive hematite units are thicker. These conditions are satisfied within the nose of the fold structure and within the minimal strain zones identified in the field. The fold structure plunges to the southeast and one would expect the hematite beds to thicken.

Despite IOC’s thorough exploration of the Schefferville area in the past, the relatively new discovery of the Joyce Lake DSO Project suggests that further DSO potential exists. Recent drilling and 3D modeling have shown that the DSO deposits located on the property have a predictable geometry and potential for tonnage additions, both within the known extents and extrapolations. All of the mineralized structures have been modeled for the first time, providing a far better understanding of the geological context and inter-relationship among structures.

Feasibility Study

Project Description

The mining plan is based on continuous operation over 360 days per year, 7 days per week, and 24 hours per day. The starter pit was designed to avoid excavation close to Joyce Lake during pre-production and construction phases. The open pit nominal production rate is 2.5 M dry tonnes per year of iron ore lump and fines products at an average grade of 61.4% Fe for the first 5.6 years.

The primary equipment fleet includes 100-tonne diesel haul trucks, 10 m³ diesel-hydraulic shovels, 10 m³ front-end loaders and 8.5” DTH blast hole drills.

Financial Evaluation Assumptions

• Long Term product price of US$95 per dry metric tonne (dmt) for 62% Fe fines CFR, China and a shipping cost of $15 per wet metric tonne (wmt).
• Exchange rate of US$0.80 per CDN$1.00.
• Life of mine of approximately 7 years.
• Initial capital cost estimate accuracy of -10% / +15%.

The initial capital cost estimate of $259.6 million excludes estimated closure costs of $4.3 million, sustaining capital of $17.4 million and salvage value of $31.1 million. These estimates are included in the feasibility study financial evaluation.