Century Iron Mines building strength on the Labrador Trough

The amount of iron ore in the Labrador Trough appears endless, and Century Iron Mines (FER-T, FER-V) is the latest company to yield promising drill results from the world-renowned geological structure.

Century released its second batch of assay results from the Attikamagen project, which sits 20 km northwest of Schefferville, Que.

Drilling focused on two areas of the property: Joyce Lake and Hayot Lake.

At Joyce Lake the highlight hole returned 127 metres grading 50.65% total iron (FeT), including 33 metres grading 61.15% FeT.

At Hayot Lake the highlight hole intercepted 149 metres grading 33.15% FeT.

The iron ore at Joyce Lake is enriched, which has the company believing that it could well be a direct-shipping ore (DSO) deposit. DSO deposits benefit because they do not require much ore procesing, which saves the company on capital expenditure and operating costs.

In contrast to the enriched iron ore at Joyce, Hayot Lake is a taconite deposit, meaning it contains high grades of silica.

Century says drilling at the two zones is finished for the year and that a third batch of assay results is expected shortly.

All told, the company drilled 10,884 metres of diamond and reverse-circulation drilling from April 8 to Oct. 30.

The next phase of drilling is set to get underway in February, with a primary focus on Joyce Lake.

The Attikamagen property covers 345 sq. km and straddles the Quebec and Labrador border, with Hayot Lake sitting on the Quebec side and the Joyce Lake sitting on the Labrador side.

Century has an option to acquire a 60% stake in the project from Champion Minerals (CHM-T). By spending $7.5 million on March exploration, Century will earn a 51% stake. It moves up to 60% by make successive payments that total $5.5 million by March 2014.

As of Sept. 30 the company was well-financed, with $90 million in cash and equivalents.

At the end of November, Century announced it had finalized its joint venture with Wisco International Resources, a unit of Wuhan Iron and Steel, China’s third-largest steel producer.

The agreement calls for Wisco to invest $120 million in the project in exchange for a 40% stake in Century’s Duncan Lake, Attikamagen and Sunny Lake projects in Quebec.

Another Chinese mining firm, Minmetals, also has a stake in Century, with a 5% interest in the company and offtake agreements on future iron production.

On Dec. 9 – the day the news was released – the company’s shares were off 4%, or 8¢, to $2 on 900,000 shares traded.