Australia-based Cyclone Metals (ASX: CLE) signed a USD$138 million agreement with Vale (NYSE: VALE) to develop the Iron Bear iron ore project in Newfoundland, Canada.
Announced originally on Monday, Vale will fund the project in two phases in return for a 75 per cent interest in Iron Bear. If it then decides to mine the project, it will trigger the option to buy the remaining percentage at fair market value or carry Cyclone through to production.
Cyclone will allocate USD$18 million for a preliminary feasibility study, mineral resource drilling, and environmental base line studies. In the second phase, the parties will form a joint venture to advance a bankable feasibility study. They will also conduct environmental impact studies, establish impact benefit agreements (IBAs) with First Nations, and undertake de-risking activities. Vale will contribute USD$120 million in funding during this phase.
The Iron Bear project sits in Newfoundland and Labrador. Furthermore, it’s less than 25 km from an open-access heavy-haul railway that connects to an export port at Schefferville. Rio Tinto Inc’s (NYSE: RIO) (ASX: RIO) Iron Ore Company of Canada (58.7 per cent owned), Champion Iron Ltd (TSE: CIA) (ASX: CIA) (OTCMKTS: CIAFF), and Tata Steel operate large-scale iron ore projects in the region, all sharing the same rail and port infrastructure.
Last year, Cyclone reported that pilot plant production at Iron Bear confirmed a high-quality direct reduction concentrate grading 71.3 per cent iron. The project holds an estimated mineral resource of 16.6 billion tonnes grading 29.3 per cent iron.
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Newfoundland sought out for polymetallic promise
Newfoundland has emerged as a key player in Canada’s precious metals sector. The province’s geology hosts significant gold, silver, and copper deposits, alongside a storied history of mining dating back centuries.
Gold exploration has intensified in recent years, with Calibre Mining Corp. (TSE: CXB) (OTMRKTS: CXBMF) leading the charge at its Valentine Gold Mine. Located in central Newfoundland, the project holds substantial proven and probable reserves and is expected to be one of Canada’s premier open-pit gold operations. Valentine also benefits from strong infrastructure, and recent metallurgical test results indicate promising gold recovery rates.
Silver and copper also play a vital role in Newfoundland’s mining landscape. Maritime Resources Corp. (CVE: MAE) is advancing its Hammerdown Gold Project, which also contains silver, near the historic Baie Verte mining district. The company aims to revive past-producing assets while expanding known resources.
Additionally, Buchans Resources Ltd. focuses on high-grade base metal deposits, including copper, zinc, and silver, at its projects in central Newfoundland. The Buchans region is renowned for its past-producing mines, and ongoing exploration efforts could unlock further value.
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