2014 03 21 march 2014 sc
TRANSCRIPT
Corporation Presentation March 2014
Century TSX: FER www.centuryiron.com
IRON MINES CORPORATION
2
Forward Looking Statement Except for statements of historical fact, this presentation contains certain “forward-looking information” within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as “plan”, “project”; “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices for metals, the conclusions of detailed feasibility and technical analyses, lower than expected grades and quantities of mineralization and resources, mining rates and recovery rates and the lack of availability of necessary capital, which may not be available to the Corporation on terms acceptable to it or at all, changes in and the effect of government policies with respect to mineral exploration and exploitation, the ability to obtain required permits, delays in exploration and development projects and the possibility of adverse developments in the financial markets generally, potential environmental issues and liabilities associated with exploration and development and mining activities. The Corporation is also subject to the specific risks inherent in the mining business as well as general economic and business conditions. The Corporation undertakes no obligation to update forward-looking information if circumstances or management’s estimates should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. More detailed information about potential factors that could affect financial results is included in the documents that may be filed from time to time with the Canadian securities regulatory authorities by the Corporation.
Century Iron Mines Corporation
Financial Highlights & Capital Structure Financial highlights (Dec 31, 2013) Cash and bank $33.2M Receivables (accounts & tax) $23.6M
Total corporate working capital $56.8M JV (Attikamagen) cash (in addition to corporate working capital) $22.3M
Exploration and evaluation assets $26.1M
Investment in a joint venture $59.5M
NAV $148.2M
Capital structure (Dec 31, 2013) Shares outstanding 98,804,071 Fully diluted Options/Grants: 10,354,000 Warrants: 1,000,000
110,168,071
Market capitalization (@ share price closed at $0.58, Mar 12, 2014)
$57.3M
Share structure Founding shareholders 34.1% Management 17.7% WISCO (23.5%) MinMetals (4.7%)
28.2%
Public shareholders 20.0% Total 100.0%
3 Century Iron Mines Corporation
4
Strategic Partnerships – A Proxy for China
Joint Venture
Attikamagen Project
100%
Minmetals Exploration & Development (Luxembourg) Limited S.à.r.l
WISCO International Resources
Development & Investment
Ltd (PRC)
Approx. 5%
Approx. 25%
60%
Sunny Lake Project
Duncan Lake Project
Augyva Mining Resources Inc. (TSXV: AUV)
35% 100%
Four projects acquired from
Altius Minerals Inc. (TSX: ALS) (Note 2)
100%
65% (Note 1)
40% Interest +60% off-take
James Bay Area
Duncan Lake
Note 1: Currently a 65% interest under an option and joint venture agreement with Augyva Mining Resources Inc. Note 2: A portion of the Astray has been spun out to Northern Star which will assume the exploration obligations while Century maintains a 20% therein
Century Iron Mines Corporation (TSX: FER)
2
4
NI 43-101 Resources Hayot Joyce
(DSO) Full
Moon Duncan Total
Measured & indicated - 24.3 Mt 7.3 Bt 1.1 Bt 8.4 Bt
Inferred 1.7 Bt 0.8 Mt 8.7 Bt 0.6 Bt 11.0 Bt
3 2 1
4
1
3
(in B
illio
ns o
r mill
ions
of t
onne
s)
Iron Ore Projects Multi Bt resources under management
Full Moon
Hayot
Joyce DSO
5 Century Iron Mines Corporation
Century is the top six largest attributable contained iron ore resource in the world (without Vale)
Century is trading at the lowest EV per contained Fe tonne
Century has more equity interest in DSO and taconite projects with a production target of 2015
Source: Company data, Credit Suisse estimates
Credit Suisse Analysis
Two Prong Strategy: Short-Term Low Capital Intensity DSO & Long-Term High Volume Project Development Approach to Maximize Economic & Strategic Value to China …
6 Century Iron Mines Corporation
0
5
10
15
20
25
30
2015 2016 2017 2018 2019
DSO Taconite
High Volume
DSO
Full Moon
Joyce DSO
Production Mtpa Target
1 2 3
4
Closest distance Target 2 Mtpa
On capex <$100M
(conceptual illustration only. Does not represent Company’s current actual assessment of its resource(1)
Taconite DSO
DSO
1.7Bt (Inferred) 1
2
3
TSH & QNSL Rail to Sept Iles
7.3 Bt (M&I) 8.7 Bt (Inferred)
DSO
4 Taconite
24.3 Mt (M&I) 0.8 Mt (Inferred)
Labrador Trough
18km
(1) Please see cautionary disclaimer statement on page 2
DSO
Progressive DSO Project Development Low capital intensity, short development cycle …
Joyce Lake Schefferville W. Lac Le Fer Other DSOs
Ownership 60% WISCO – 40%
100% 60% WISCO – 40%
100% 60%
Resource M+I: 24.3Mt Inf: 0.8Mt Continued drilling
to expand/upgrade resource
Geophysics Orientation drilling Resource drill
ready
Geophysics Orientation drilling Resource drill
ready
Exploration
PEA BFS Target completion 2014
Succeeding DSO projects to sustain a continuous DSO operation with movable equipment designed for possible minimal Capex
EIS EA
EIS Target completion 2014
EA Target completion 2015
Production 2Mtpa (target) Targeting 2015-16
Infrastructure Joyce Lake road and rail loop for all DSO and future projects Existing rail and port capacity can accommodate
Off take 60% WISCO 100% available 60% WISCO 60% WISCO
7 Century Iron Mines Corporation
8
Century Iron Mines Corporation
Joyce Lake DSO Deposit 143% increase in M&I resource estimate
SGS Mineral Resource Estimate Comparison Summary (at 50% Fe cutoff, in tonnes )
Resource Classification
Previous Estimate
March 20132
Current Estimate
February 2014 % Change
Measured (“M”) 5,050,000 18,650,000 + 269
Indicated (“I”) 4,950,000 5,640,000 + 14
M+I 10,000,000 24,290,000 + 143
Inferred 5,600,000 840,000 - 85
1. at 50% Fe cut-off 2. NI 43-101 Technical Report, Joyce Lake DSO Iron Project, Newfoundland & Labrador, April 18, 2013, filed on SEDAR
9
Post-PEA Drilling Update on Joyce
Century Iron Mines Corporation
Resource Highlights
M+I resource estimate of 24.3 Mt Resource model based on 172 holes
and 18,845 metres An aerial extent of 1.1 km strike &
600m width The mineralization remains open to
the south along strike
February 2014 Estimate Tonnes3 % Fe % SiO2 % Al2O3 % Mn
Measured (“M”) 18,650,000 58.67 13.02 0.55 0.81
Indicated (“I”) 5,640,000 58.14 14.39 0.51 0.54
M+I 24,290,000 58.55 13.34 0.54 0.75
Inferred 840,000 62.00 8.43 0.43 0.78 1. Mineral resources are not mineral reserves and do not have demonstrated economic viability. 2. Within Mineralized envelope, % Fe cut-off on individual blocks. The base case for public disclosure DSO is the statement with cut-off of 50% Fe. 3. Variable SG density (equation derived from core measurements), tonnes rounded to nearest 10,000.
10 Century Iron Mines Corporation
Joyce Lake DSO Deposit Preliminary Economic Assessment (March 25, 2013)
Pre-tax Post-tax
Payback 2.5 years 2.6 years
IRR 37% 27%
NPV @8% $90.4M $51.8M Based on 100% ownership of the project
2 Mtpa of lump (35%) and sinter fines (65%) production at 62.2% Fe with a mine life of 4 years (first year: 1Mt) as a first stage
Total estimated capital costs (excluding sustaining capital) of C$96.6 million
Total estimated operating costs (loaded in a ship at Port of Sept-Iles) of C$62.8 per tonne of lump and sinter fines
Moving into a planned BFS process based on the new resource
Note: The PEA is preliminary in nature. It may incorporate inferred mineral resources which are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There can be no certainty that the estimates contained in the PEA will be realized. In additional, mineral resources that are not mineral reserves do not have demonstrated economic viability.
PEA based on 10,000,000 tonnes estimated March 25, 2013
Resource Classification
March 20131
Estimate February 2014
Estimate %
Change
Measured (“M”) 5,050,000 18,650,000 + 269
Indicated (“I”) 4,950,000 5,640,000 + 14
M+I 10,000,000 24,290,000 + 143
Inferred 5,600,000 840,000 - 85 1. At 50% Fe Cutoff, in tonnes 2. NI 43-101 Technical Report, Joyce Lake DSO Iron Project, Newfoundland & Labrador, April 18, 2013, filed on SEDAR.
Post PEA Resource Estimate Comparison
11 Century Iron Mines Corporation
Joyce Lake Preliminary Economic Assessment FOB Operating Cost (Note 1) $/tonne
Mine 21.40 Crushing & Screening Plant 4.35 General and Administration 6.85 Product Hauling 2.82 Rail Yard Operation 0.86 Rail Transportation 22.36 Port Handling 4.16
Total Opex FOB, Sept Iles 62.80
Capital Cost $ millions
Joyce Lake Mine 10.8
Crushing & Screening Plant 10.5
Railroad and Yard (1) 10.3 Rail Cars (2) 20.4 Haulage Road and Infrastructure (1) 24.3 Trucks (2) 6.7
Total Direct Cost 83.0
Indirect Cost at 10% of Direct (excluding mobile equipment)
5.6
Contingency 10% of Direct Cost 8.0
Total Project Cost 96.6
Highlights: Infrastructure benefiting future operation (1) 34.3 Trucks & Ore Cars (leasable) (2) 27.0
.. A bite-size project within reach of balance sheet & market cap
Highlights: 2.0 Mtpa of lump (35%) and sinter fines (65%) production at 62.2% Fe with a mine life of 4 years (first year: 1Mt) as a first stage
PEA FOB price assumptions: Lump $ 108/t Sinter fines $ 93/t Note 1: Opex is estimated on FOB Sept Iles basis Note 2: Based on 100% ownership of the project
Joyce Lake Development Roadmap
2013 2014 2015 2016
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Environmental Studies
Feasibility (BFS)
EA/Permitting & IBA Construction & Overburden removal/ Mining & Pre-Production
Commercial Production & Shipping
12 Century Iron Mines Corporation
2014 Catalysts
Completion of Environmental Impact Study on Joyce Lake Bankable Feasibility Study for Joyce Lake
Helluva
Joyce Lake
Prudhomme
DSO Beyond Joyce Lake A number of DSO targets under exploration
Lac Le Fer Area
Joyce Lake Area
Schefferville West Area
LLF P3 DSO Target, Mag and Gravity
Completed Holes Proposed Holes
Completed Holes
LLF-P3-004 62.3% FeT/45.0m (ended in IF)
LLF P3 DSOLLF-P3-004 Assay result
Sample ID From to Length
(m) TFe %
502509 3 9 6 9.48
502510 9 12 3 52.5
502511 12 15 3 56.3
502513 15 18 3 58.5
502514 18 21 3 60.5
502515 21 24 3 60.8
502516 24 27 3 64.5
502517 27 30 3 64.7
502518 30 33 3 64.6
502519 33 36 3 65.3
502520 36 39 3 64.6
502521 39 42 3 64.7
502522 42 45 3 66.2
502523 45 48 3 65.5
502524 48 51 3 67.1
502526 51 54 3 58.3
Naturally enriched >62% grade & good thickness
Century Iron Mines Corporation 14
Schefferville West: Red Dragon DSO target
Re-trenching and exploratory drilling
Three gravity anomalous belts are delineated, length at 5 – 12 km long; corresponding to leached BIF;
Two correlated to magnetic low; High grade mineralized ore
exposed; Two RC holes encountered 12-15
m >60% TFe zone.
Century Iron Mines Corporation 15
Redmond
Easier access and close to the railway
Close to LIM’s Redmond Mine Further exploration planned in
2014
Full Moon Taconite Deposit, Rainy Lake First Resource Estimate by SRK
Century Iron Mines Corporation 16
Resource model based on 124 diamond holes on
22,900 meters (out of total 2010-12 total drilling of 30,941 meters over 148 diamond holes;
An update resource estimate to come upon complete results on all holes modeled & analyzed
11km strike length (open both to the north & south of the Deposit) & up to 4km across
Combined true thickness of iron ore units often exceeds 200m
* Mineral Resource Evaluation, Full Moon Taconite Iron Deposit SRK Consulting,, Jean-Francois Couture, December 6, 2012
Mineral Resource Estimate* (at 20% Fe cutoff – December 6, 2012)
Resource category Billion tonnes Grade TFe%
Indicated 7.260 30.18 Inferred 8.694 29.86
Resource Highlights
Transportation – Iron Projects in Labrador Trough
Sept-Iles
Pointe-Noire Port-Cartier
Ross Bay Junction
Mont-Wright
Labrador City
Schefferville
Sunny Lake
Attikamagen
Railway Distance:
Schefferville to Ross Bay Junction: 217 km
Ross Bay Junction to Sept-Iles: 356 km
Labrador City to Ross Bay Jct: 58 km
Mont-Wright to Port Cartier: 400 km 0 50 100 km
Adriana (WISCO)
Altius Projects
QNS&L (Common Carrier) runs 573km from Schefferville to Sept-Iles Attikamagen to Schefferville: 15km
(from the closest point) Joyce Lake targets 1-3Mtpa DSO
• Using existing Railroad infrastructures: QNS&L & TSR
Rainy Lake (Full Moon) targets 20Mtpa+
Full Moon Lac Le Fer
Joyce & Hayot
Century Iron Mines Corporation 17
Port of Sept-Iles: 50Mtpa Expansion
Main port is over 23.2 m in depth Accommodates Capesize or larger
vessels Fully equipped, can be operated year-
round 50Mtpa $220M expansion plan to be
completed in 2014 with more than $100M in commitments from miners and governments, $55M from federal government
Alumina Plant
Multi user Berth
By Port of Sept-Iles
• Natural shelters, deep water for year-round access by iron ore ships
• Ability to expand as required
0 500 m
IOC Port
Century Iron Mines Corporation 18
Sandy Chim President
& CEO
Peter Jones, Executive VP, Mine Development & Logistics
Ivan Wong, SVP Corp Finance & Project Development
Rebecca Ng, CFO
Claude Britt, Chief Geologist
Michael Skutezky, General Counsel & Corporate Secretary
Bob Leshchyshen, VP, IR & Corporate Development
Management Gearing up for 2015-6 production & beyond
Century Iron Mines Corporation 19
New iron ore mine development
Resource discovery & development
China steel mill & iron ore trading
Capital market & building materials
Iron ore mining & logistic operations
Cor
e co
mpe
tenc
e, e
xper
tise
an
d ex
perie
nce
Low capital intensity 2Mtpa DSO production Joyce Lake Project within reach of balance sheet and market cap
Global Fortune 500 Strategic Partners (WISCO & Minmetals) / Off-takers from China – A proxy for China
Top 10 iron resource company in the world providing economic and strategic value for China … second phase longer term development on high volume taconite projects
Management with track record of performance – managed through the last part of cycle well to put company in a strong cash position in a very tough market
Trading below working capital / cash in JV – large valuation gap
Summary
Century Iron Mines Corporation 20
What sets Century Iron Mines apart
Projects • Labrador Trough
• Long history as mining camp with operating infrastructure
• Joyce Lake (DSO) • PEA BFS • ~20km to
Schefferville / rail • EIS permit 2014 • Targets 2Mtpa on
>$100M capex – bite size
• Other DSO targets & high volume deposits along strike
• Global Fortune 500 Strategic partners: WISCO & Minmetals
Products • DSO (Direct
Shipping Ore) – • One of most
popular products for blast furnaces
• Off-take: 60% WISCO, with balance available to other strategic partners (Minmetals) & traders
• Concentrate & pellet products over the long term
Competitiveness • Bite-size DSO
projects • Low capital
intensity • Quick to production
• Reasonable cost • 2Mtpa – existing
infrastructure can accommodate
Capital • $>$100M capex • $50M working
capital on balance sheet
• Received an additional $20M (Sept) from WISCO by JV
21 Century Iron Mines Corporation
22 Century Iron Mines Corporation
Appendices
23 Century Iron Mines Corporation
Comparable Table (based on total resources)
Prepared by: Bob Leshchyshen, MBA, CFA
(1) Adriana: Wisco has 60% interest in the property (2) New Millennium: Tata Steel has 80% interest in all the properties except Lac Ritchie (3) Cliffs: WISCO has a 25% interest in Bloom Lake (4) Century: Auguyva has 35% in Duncan Lake and WISCO has 40% interest in all of the other properties. (5) Rio Tinto plc has a 58.72% in IOC, Mistibishi has 26.18% interest and Labrador Iron Ore Royalty Corp. has a 15.1% interest. (6) Alderon: Hebei Iron & Steel Group Co.
Ltd has a 25% interest in Kami iron project.
Companies in the Labrador Trough NI43-101 Resources Disclosed
Stock (Mils) tonnes Proven & Measure Symbol NI43-101 Resource Estimates Probable & Indicated Inferred Total
ADI Adriana Resources Inc. (1) 0 20,640 6,840 27,480NML New Millennium Capital Corp. (2) 5,750 14,048 4,405 24,203CEV Cap-Ex Ventures Ltd. 0 0 7,200 7,200
CHM Champion Iron Mines Ltd. 0 858 3,997 4,854FEO Oceanic Iron Ore 1,359 1,268 193 2,821ADV Alderon Resource Corp. (6) 669 1,275 523 2,466LIM Labrador Iron Mines Holdings Limited 0 44.6 5.2 49.8
Major Iron CompaniesMT ArcelorMittal (including Baffinland) 2,340 4,903 1,510 8,753CLF Cliffs Natural Resources (3) 649 1,976 711 3,336RIO Rio Tinto plc (IOC) (5) 1,374 1,091 1,372 3,837
FER Century Iron Mines Corp. (4)Duncan Lake 0 1,051 563 1,614Joyce Lake 0 24.3 0.8 25.1Hayot Lake 0 0 1,723 1,723Rainy Lake 0 7,260 8,694 15,953Total FER 0 8,335 10,980 19,315
Total all companies 12,141 54,437 37,736 104,314
24 Century Iron Mines Corporation
Comparable Table (based on attributable resources)
Prepared by: Bob Leshchyshen, MBA, CFA
Companies in the Labrador Trough Attributable Tonnes Contained FE tonnes Fe% Fe% Fe%
Stock (Mils) tonnes Proven & Measure Proven & Measure Proven & Measure Symbol NI43-101 Resource Estimates Probable & Indicated Inferred Probable & Indicated Inferred Probable & Indicated Inferred Total
ADI Adriana Resources Inc. (1) 0 6,145 2,038 0 28.94% 30.40% 0 2,402 832 3,234NML New Millennium Capital Corp. (2) 1,757 4,140 1,303 30.55% 29.63% 30.31% 351 2,496 813 3,661CEV Cap-Ex Ventures Ltd. 0 0 2,102 0 0 29.20% 0 0 2,102 2,102
CHM Champion Iron Mines Ltd. 0 172 1,670 0 30.58% 28.49% 0 277 1,105 1,382FEO Oceanic Iron Ore 438 410 64 32.21% 32.36% 32.90% 438 410 64 912ADV Alderon Resource Corp. (6) 197 378 154 29.52% 29.68% 29.45% 148 284 115 547LIM Labrador Iron Mines Holdings Limited 0.0 25.2 2.9 0 56.45% 55.42% 0.0 25.2 2.9 28.0
Major Iron CompaniesMT ArcelorMittal (including Baffinland) 809 1,471 603 34.56% 30.00% 39.94% 809 1,471 603 2,883CLF Cliffs Natural Resources (3) 198 595 20 30.55% 30.11% 28.60% 155 534 20 709RIO Rio Tinto plc (IOC) (5) 522 417 521 38.00% 38.21% 38.00% 307 245 306 858
FER Century Iron Mines Corp. (4)Duncan Lake 0 256 139 0 24.39% 24.70% 0 167 90 257Joyce Lake 14.2 0.5 0 59.45% 55.78% 0.0 8.7 0.3 9.0Hayot Lake 0 0 538 0 0 31.25% 0 0 323 323Rainy Lake 0 2,191 2,596 0 30.18% 29.86% 0 1,315 1,558 2,872Total FER 0 2,462 3,274 0 29.45% 29.81% 0 1,490 1,971 3,461
Total all companies 3,921 16,216 11,753 32.30% 29.79% 31.14% 2,207 9,634 7,935 19,777
25 Century Iron Mines Corporation
Comparable Table (based on attributable resources)
Prepared by: Bob Leshchyshen, MBA, CFA
FE EV P&P FE Close Market Enterprise M&I EV/ Total* EV/
Stock 12-Mar 52 week Shares Cap Cash Value mils FE mils FEsymbol Name 2014 Low High O/S (mils) $mils ($mils) ($mils) tonnes tonne tonnes tonne
NML New Millennium Capital Corp. $0.45 $0.47 $1.17 180.0 $81.0 $8.0 $73.0 2,847.8 $0.026 3,660.9 $0.020ADI Adriana Resources Inc. $0.225 $0.155 $0.385 157.6 $35.4 $50.9 ($15.5) 2,401.9 ($0.006) 3,233.6 ($0.005)CEV Cap-Ex Ventures Ltd. $0.045 $0.040 $0.285 97.8 $4.4 $1.0 $3.5 0.0 n/a 2,102.4 $0.002CHM Champion Iron Mines Ltd. $0.34 $0.155 $0.43 137.9 $46.9 $8.1 $38.8 276.7 $0.140 1,381.7 $0.028FEO Oceanic Iron Ore Corp. $0.095 $0.08 $0.20 196.6 $18.7 $8.1 $13.7 848.2 $0.016 911.9 $0.015ADV Alderon Resource Corp. $1.62 $0.88 $2.13 130.1 $210.8 $113.8 $97.0 431.7 $0.225 547.2 $0.177
$397.3 $190.0 $210.5 6,806.3 $0.031 11,837.7 $0.018
FER Century Iron Mines Corp. $0.58 $0.30 $0.72 98.9 $57.3 $33.2 $24.1 1,489.9 $0.016 3,461.2 $0.007
* Total includes Proven and Probable, Measure and Indicated and Inferred Resources.
26 Century Iron Mines Corporation
Century Iron Mines Corporation Bob Leshchyshen
VP, Corporate Development and IR (416) 977-3188 Ext. 109
CHF Investor Relations Robin Cook
Senior Account Manager (416) 868-1079 Ext. 228
Contact Information