- Both firms to share costs on rail, power and reduction
facilities.
- NFE will manage mining and production on both NFE and OIMI
assets.
- OIMI will focus on sourcing the entire capital investment
from Asian investors.
- OIMI to market iron products in Asia.
VANCOUVER,
March 5, 2013 /CNW/ - Northern
Iron Corp. ("Northern" or the "Company") (TSX-V: NFE) (OTCQX-
NHRIF) (FRANKFURT: N8I) today announced the signing of a
non-binding Memorandum of Understanding with Ontario Iron Mining
Inc. (OIMI). The MOU outlines how both firms will work together to
bring the properties OIMI has agreed to purchase subject to
satisfaction of certain conditions and the properties currently
owned by NFE to the production stage.
"The assets where we have agreed to share costs
are the most capital intensive part of bringing this area into
production. This MOU is a further step in de-risking the
development of the Griffith mine,"
says Basil Botha, President and CEO
of Northern Iron. "We believe that by working together we can
create hundreds of quality jobs and re-develop an area of
Canada that was a historic iron
mining region. The Red
Lake-Ear Falls area will
benefit from this partnership and our access to deep pocketed
investors in Asia."
Jason Li, CFO of
OIMI said, "We view the logistics of this area to be the most
favourable of any Canadian iron ore deposit that we have
investigated. Our investors appreciate the existing infrastructure
and the political stability of Canada. We also believe that there is minimal
downside risk as the area is a past producer."
Both firms agree that they will benefit mutually
from shared: rail, power supply and production facilities and have
agreed under the MOU to cooperate as follows:
- Share capital costs to rebuild and update the rail, power and
production facilities.
- Each firm will work towards mining iron ore from their
wholly-owned properties however Northern Iron will manage mining,
crushing and beneficiation at all the properties as they come into
production.
- Ore from satellite properties will be processed at the
Griffith property and processed
into Hot Briquetted Iron (HBI) for export.
- OIMI will endeavour to fund the project's capital requirements
from Asian investors and will manage the marketing of HBI to Asian
markets where they already supply a number of state owned
enterprises in China with iron
ore.
In order to facilitate this process, Northern
Iron has agreed to extend the deadline for closing on the
properties that OIMI contracted to purchase in October 2012, until May
31st 2013.
About Northern Iron Corp.
The Company is a 100% owner of five iron ore
properties in the Red Lake
district containing over 500 million tonnes of historical resources
with grades ranging from 22% to 31% Fe. The Red Lake district is situated in an
established mining area in Ontario, where the company has two near term
development projects, the past producing Griffith mine and the Karas property.
A qualified person has not done sufficient work
to classify the historical estimate as current mineral resources,
the issuer is not treating the historical estimate as current
mineral resources.
The Company is currently working towards the
production of HBI, a transportable form of direct reduced
iron. HBI is complementary and a viable metallic alternative
to scrap steel. Quality scrap is a critical raw material in the
steel making process. With the diminishing supply of quality scrap
steel and ever increasing market demand, steel producers around the
world will be looking to secure alternative supplies of metallic
products.
As part of the business plan, the Company
acquired the past producing Griffith mine, which produced pellets and
sponge iron (Direct Reduced Iron/DRI) from 1968 to 1986. The
mine was owned and operated by STELCO and supplied pellets and
sponge iron to the Hamilton and
Nanticoke steel mills in
Ontario. The metallurgy of the
deposit has been proven over eighteen years of production.
Almost the entire transportation infrastructure
is currently in place to both produce HBI and to ship produced HBI
into the North American market via rail and lake barges and into
Asian markets via rail through the port of Prince Rupert. Existing infrastructure
includes all weather roads, 115kV power line, natural gas line,
rail bed and port facilities.
The Company is focusing on de-risking the
project by seeking out potential joint venture partners, off-take
agreements or a combination thereof.
Cautionary Statement
The foregoing information may contain
forward-looking statements relating to the future performance of
the Company. Forward-looking statements, specifically those
concerning future performance, are subject to certain risks and
uncertainties, and actual results may differ materially from the
Company's plans and expectations. These plans, expectations, risks
and uncertainties are detailed herein and from time to time in the
filings made by the Company with the TSX Venture Exchange and
securities regulators. The Company does not assume any
obligation to update or revise its forward-looking statements,
whether as a result of new information, future events or
otherwise.
Neither the TSX Venture Exchange nor its
Regulation Service Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release. No stock exchange,
securities commission or other regulatory authority has approved or
disapproved the information contained herein.
SOURCE Northern Iron Corp.