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
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
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
The Company is focusing on de-risking the project by seeking out
potential joint venture partners, off-take agreements or a combination
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
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.
For further information:
President & CEO
Northern Iron Corp.
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