Vancouver, British Columbia--(Newsfile Corp. - May 16, 2013) - Toronto based eResearch has updated coverage on Century Iron Mines (TSX: FER). Analyst Bob Weir gives the company a speculative buy recommendation with an initial short-term target of $0.77, a premium of 93% over the $0.40 price the day the report was issued. Going further out within the year, eResearch sets a second target of $1.25.
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Century Iron Mines is one of the largest iron ore companies in Canada, in terms of number of claims by area, with 6,657 claims and titles, covering some 202,000 hectares in the provinces of Québec and Newfoundland & Labrador.
Having added considerably to its resource estimate in 2012 and further in 2013, it is now one of the largest iron ore companies in Canada.
The Duncan Lake project, the only project not in the Labrador Trough, is located in the James Bay region of Quebec. A recent Preliminary Economic Assessment for Duncan Lake gives a Net Present Value of $4.1 billion, using an 8% discount factor. It gives an estimated mine life of 20 years, and a payback period of 4.2 years. This is based on only two of six deposits at Duncan Lake, which contain some 800 million tonnes of mineral resources.
Three others projects are located in the Labrador Trough region of Québec and Newfoundland & Labrador.
One of these projects includes the Joyce Lake project, with a recent NI 43-101 compliant estimate showing 10 million tonnes of Measured and Indicated mineral resources, with an average grade of 59.45% total iron, plus an additional 5.6 million tonnes of inferred mineral resources at a cut-off grade of 50% iron.
The company has two strategic Chinese investors (1) Wuhan Iron and Steel (WISCO) with a 25% equity interest and (2) China Minmetals with a 5% equity interest. It has signed definitive joint venture agreements with WISCO for two properties, as well as off-take agreements for almost 70% of its future production.
eResearch cautions that the price of iron ore is strongly influenced by economic conditions, and Chinese steel companies in particular. Also, the off-take agreements are preliminary in nature, and future agreements will depend on the success of the projects' exploration, and the iron ore market.
Analyst Bob Weir stated, "We rate the shares as a speculative buy, based on its attractive project portfolio, strong liquidity, two key Chinese investors, and possible initial production by 2015".
The shares trade at $0.43, and with approximately 95 million shares outstanding, the company is capitalized at $41 million.
For more information on the company and their various projects, please visit their website at www.centuryiron.com, or contact Bob Leshchyshen, VP Corporate Development & Investor Relations at 416-977-3188 ext 109 or email bob.leshchyshen@centuryiron.com.
The company's investor relations is handled by Robin Cook of CHF Investor Relations, who can be reached at 416-868-1079 Ext 228 or email robin@chfir.com.
For a copy of the report, contact eResearch at www.eresearch.ca. While on their site, sign up for their free reports.
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