Junior iron-ore company Tacora Resources is bringing back to life the defunct Scully mine in Labrador West, Canada, and announced on Tuesday that it had secured the necessary financing to restart operations.

The company closed $212-million in private equity and senior secured debt financing, which together with existing commitments for up to $64-million in mining equipment debt financing, means it is fully funded to resume operations.

Tacora last year purchased substantially all the assets associated with the Scully mine, which was shut by Cliffs Natural Resources in 2014, leaving about 400 workers out of jobs.

The company has subsequently completed a feasibility study, which delivered robust economic results with an after-tax net present value of C$1.12-billion and an internal rate of return of 40.7%. Initial capital is estimated to be C$205.5-million and sustaining capital C$441.7-million, with a payback period of 2.6 years.

The mine is set to produce an average of six-million tonnes a year of concentrate at a grade of 65.9% - exceeding the industry standard 62% benchmark and the high-grade 65% benchmark. China's crackdown on pollution, along with the higher margins at steel mills, has seen demand for high-grade iron-ore increasing substantially.

CBC News reports that Tacora is aiming to produce its first concentrate in June 2019.

US group Cargill will buy 100% of the mine’s output and as part of the financing agreement, the company had made an equity investment and extended its long-term offtake agreement to 2033.

Tacora has secured life-of-mine access to rail transportation services and ship loading infrastructure, including access to a deep-water port with Société ferroviaire et portuaire de Ponte-Noire and the Port of Sept-Iles, and concluded various regulatory matters with the government of Newfoundland and Labrador, including consultations with local indigenous peoples.