The high profile Mary River iron ore mining project on Baffin Island has garnered most of the press attention. There is indeed a second large iron ore project nearing launch - Advanced Exploration’s Roche Bay project.
The Roche Bay Project boasts an NI 43-101 compliant resource estimate of over 500 million tonnes of high grade iron ore. The project is located very close to tidewater on the Melville Peninsula in Nunavut. The company is planning a 5.5 MTPA operation, over 20 years. Shipping would be by cape-size ships in the open water season (last 6 months of the year).
Advanced Exploration has partnered with Chinese-owned SOE XinXing Pipes Group. The Chinese connection will help with capital requirements of $1.4B plus expertise on getting milling modules built in China and shipped over by barge. The company is looking for a mine permit this year and some site preparation work to begin in 2014.
Interestingly, Advanced Explorations Inc.plans to consider LNG as part of its Roche Bay development plan. The unique coastal location of the Roche Bay project affords the Company the opportunity to utilize a turnkey, modular LNG power and distribution solution with the potential to reduce both AEI’s associated capital requirements while still capturing significant operational savings. Power represents 30-35% of operating costs, so the potential savings from LNG is attractive.
The project will produce about 450 construction jobs and 370-380 operations jobs.
Advanced Explorations Inc. is listed on the TSX (ticker AXI) It rades at $0.05/share with a $9M market cap. During 2013 the share price has fallen from $0.20 to $0.05.
This project is very exiting for a number of reasons - an iron ore mine in Nunavut, that may begin before Mary River, plus its proposed use of LNG as fuel source. There is no LNG used in Nunavut and its use in this mine may open doors for future use in the energy sector.
Still its a tall order for a company with a $9M market cap to finance a $1.3B project.