Brian Dalton of Altius Resources says his company is delighted its Julienne Lake Alliance partnership has been selected to enter into detailed negotiations with the provincial government for mineral rights to the Julienne Lake iron ore prospect.
The Julienne Lake Alliance includes Altius Resources and two as-yet unnamed Chinese companies as backing partners.
“They’re both very large, integrated Chinese steel companies with international operations. They’re major mining and steel companies — global scale,” Dalton said, when asked Wednesday about the alliance’s membership.
He said he could not release the names of his partners at this point.
As The Telegram has reported, the provincial government spent more than $3 million between 2009 and 2013 to gather data and complete early mineral exploration at the 334-hectare property, found roughly 25 kilometres from Wabush and Labrador City.
In the past year, the government has quietly continued a search for what it would consider to be the right investor to further the work on the property, moving towards development of a new iron ore mine for Labrador West.
The government issued a call for expressions of interest in October 2012, closing in November. In all, 13 proposals were received.
Coming out on top following evaluations was a proposal from the Julienne Lake Alliance, including Altius.
Natural Resources Minister Derrick Dalley said at this stage, the government’s aim is to get the biggest benefit for the taxpayers out of the development.
“We want to make sure that not only is there jobs attached to this, but like we’ve done with so many of our other project developments in the province, we want to make sure we maximize the benefits,” Dalley said. “because it belongs to the people of the province, we’ll build in a royalty — a net-smelter royalty of some sort, or some other commercial arrangement with the company — so that as the mine develops and progresses, we’ll get additional benefits for the people of the province.”
Dalton said this is really the last stage before they get the ball rolling with a mine.
“There’s quite a lot known about that deposit. It’s been in the works and considered for development for a long time. Really what would happen here is if we’re successful in concluding the final documents, we would launch immediately on a feasibility study to test the economics,” Dalton said.
“We’ve done work at the concept study level and that was part of our bid, and that was very comprehensive. And at the concept level it certainly looks promising and it looks promising in the current iron ore environment.”
Dalton said he remains bound, in term of how much he can say about the property and plans for it at this point.
He said if the alliance secures mineral rights, more drilling and assessment work would be required at site, along with the completion of a full feasibility study.
According to a government statement highlighting the advancement of the Julienne Lake file, the identified iron ore resource at the site could lead to a mine with the ability to operate for 25 years and produce up to 22 million tonnes of iron ore concentrate each year.
“Through geoscience exploration, the provincial government successfully identified an iron ore deposit of significant economic value in western Labrador. We are now moving ahead by engaging the private sector to maximize the development of this resource and to support a sustainable economy for Newfoundlanders and Labradorians,” Natural Resources Minister Derrick Dalley said in the statement.
A development at this point is not guaranteed.