Canada’s Labrador Iron Mines has completed a preliminary economic assessment (PEA) for its Houston project, located in the Labrador Trough region near Schefferville.
The results of the PEA support the company’s plan to resume iron-ore production with low restart capital of C$86.8-million and robust economics at a time when the global iron-ore markets are strong, says chairperson and CEO John Kearney.
The PEA calculates a net present value of C$109-million and an internal rate of return of 39%. A 36-month trailing average iron-ore price of $90/dmt, which is about 45% of the current market price, was used.
“At current market prices the Houston project will yield spectacular financial results,” says Kearney.
The study forecasts the production of two-million tonnes a year of high-grade (62%) direct shipping ore for 12 years.
The project consists of the Houston 1, Houston 2 and Houston 3 deposits located in Labrador and the adjacent Malcolm deposit located just over the provincial border in Quebec. The Houston 1 and Houston 2 deposits have been permitted and are considered ready for construction. The Houston 3 deposit and Malcolm deposit are planned to come on stream in the second half of the 12-year projected mine life, following permitting.
“The Houston project is considered ready for construction as the first stage deposits have already undergone extensive regulatory review and permitting approval. With an 18-month construction period, the Houston project has very low technical risk, with only a short gravel road and rail siding as the principal construction components,” says Kearney.
The project is expected to employ 297 people in total at its peak, with about 20% of the labour force sourced from local communities.