M3 Metals has engaged Hatch to update a 2013 preliminary economic assessment (PEA) on its Block 103 iron ore project in the Labrador Trough in Newfoundland, Canada.
M3, which changed its name from ML Gold in July to reflect its diversified portfolio, had first signalled the revival of the project in May. The company noted the more positive outlook for iron ore, a rising price, and the attractive currency rate for Canadian producers.
Iron ore prices have risen from below $70 per tonne last year to around $120 per tonne in July. However, since M3 Metals’ Aug. 2 announcement, the price of iron ore dropped more than 20% to $95 per tonne. The drop comes as Vale works towards bringing capacity back online in Brazil after its tailings dam failure early this year, and as concerns over demand and heightened trade tensions between the U.S. and China weigh on prices.
Block 103 has an inferred resource of 7.2 billion tonnes grading 29.2% total iron in the Greenbush zone. The PEA, completed by Cap-Ex Iron Ore, was based on a 1.9 billion-tonne portion of the resource and estimated capital costs of C$4.2 billion for the project.
The project is close to established infrastructure and is about 30 km northwest of Schefferville, Quebec.
(This article first appeared in the Canadian Mining Journal)