Consolidated Thompson-Lundmark Gold Mines Limited

Consolidated Thompson-Lundmark Gold Mines Limited

October 12, 2005 08:15 ET

Consolidated Thompson Signs Provisional Agreement with Prosperity TCMA Mining Limited to Finance Bloom Lake & Purchase its Iron Ore Production for China

TORONTO, ONTARIO--(CCNMatthews - Oct. 12, 2005) - Consolidated Thompson-Lundmark Gold Mines Limited (TSX VENTURE:CLM) ("CLM" or "the Company") is pleased to announce the signing of a provisional agreement defining terms leading to the creation of a 49%/51% joint venture on the Company's Bloom Lake Iron Deposit with Prosperity TCMA Mining Limited, a British Columbia corporation ("PTCMA") whose primary business is supplying raw materials to China.

The agreement

Under the terms of the agreement, PTCMA will invest CDN$20,000,000 ("the Investment") on or before January 21, 2006 in the proposed joint venture to be used for the development of the Property subject to provision of a positive bankable feasibility study satisfactory to PTCMA by CLM at CLM's expense on or before January 15, 2006. Upon completion of the entire Investment in the Property, CLM agrees to convey to PTCMA an undivided 51% per cent interest in the Property and the joint venture.

PTCMA shall be entitled, but not obligated, to negotiate and enter into off-take agreements with the joint venture on commercially reasonable terms to purchase all products derived or produced from the Property. Should the selling price of any such products be lower than the fair market price at the time of the sale by a margin of more than 5%, CLM shall have the option to be exercised in its sole discretion to sell its 49% proportionate share of the off-take from the Property in any manner that it sees fit.

CLM will be the operator of the joint venture subject to the direction of a Management Committee comprised by the Joint venture.

The agreement with PTCMA is subject to the completion of due diligence, the approval of the shareholders of Consolidated Thompson and all required regulatory approval. The Company expects to execute a definitive agreement for the transaction shortly.

Richard Quesnel, CLM's President stated:

"We are very pleased to have the involvement of PTCMA in the development of the Bloom Lake project. Our ability to establish End-user contracts and confirm the quality and size of the deposit at an early stage are important steps in moving the project forwards. PTCMA brings to the group extensive experience in supplying raw materials, particularly iron ore, to China, an end-user of continually growing importance".

Prosperity TCMA Mining Limited

PTCMA is a newly formed Canadian arm of a Group of companies with its base in the Far East. PTCMA is associated with the Prosperity Group which has an established history of over 20 years in a diverse sector which includes trading in base metal and building materials, cement and clinker production and distribution, shipping, pig iron and steel manufacturing and other investments in China and Asia.

The Bloom Lake Deposit

The Bloom Lake Iron Ore Property, is located in Normanville Township, Duplessis County, Province of Quebec, on the south end of the Labrador Trough, approximately 400 km north of Sept-Iles. The Bloom Lake deposit is situated approximately 10 km north of the Mont-Wright iron mining operation of Quebec Cartier Mining Company.

On June 29, 2005, the Company announced the results of the recently completed 43-101 review of the Bloom Lake Iron Ore Property carried out by Watts, Griffis and McOuat Limited, Consulting Geologists and Engineers (WGM) (The report was authored by Richard W. Risto, P.Geo., Senior Associate Geologist, H.E. ("Buzz") Neal, P.Eng., Senior Associate Geologist, and Michael W. Kociumbas, P.Geo., Vice-President and Senior Geologist, all qualified persons under NI-43-101), which defined resources of the following:

Total in situ Mineral Resources at a Cutoff Grade of 15% Total Fe
Volume Tonnage Average
Resource bcm(i) tones Grades
Category x 1,000 x 1,000 Total Fe% Magnetite% CaO% MgO%
Measured 141,350 488,465 29.91 10.54 2.32 2.18
Indicated 43,372 149,232 29.29 10.55 2.37 2.15
+ Ind. 184,722 637,697 29.76 10.54 2.33 2.17
Inferred 10,322 35,697 30.97 8.47 0.84 0.82

(i) Bulk cubic metre - A historic unit of measure in the iron ore

The Inferred Resource is in addition to the Measured and Indicated Resource.

Following the report's recommendations, a significant 2005 program is being carried out by WGM Limited and Breton Banville Associates of Montreal to establish the optimum bench-scale metallurgical flowsheet for resource material from the deposit as well as preliminary studies on the various parameters determining the economic viability of an eventual mining and processing operation at Bloom Lake.

In addition, the Company plans to raise up to $1,060,000 by way of a non-brokered private placement through the issuance of common shares priced at $0.53, subject to regulatory approval.

Consolidated Thompson-Lundmark Gold Mines Ltd. is an exploration and development company. With the quality and size of the Bloom Lake deposit (NI 43-101 Mineral Resource totaling 638 million tones grading 29.76 % total Fe) and the signing of a provisional agreement with an end-user group it reflects the Company's ability to advance the project and other opportunities in the Iron Ore area. The Company has approximately 10 million shares outstanding and trades on the TSX Venture Exchange under the symbol "CLM".



Contact Information

  • Consolidated Thompson-Lundmark Gold Mines Limited
    Richard Quesnel
    (514) 249-6320
    Consolidated Thompson-Lundmark Gold Mines Limited
    David Meyer
    Manager of Corporate Development
    (416) 861-5891