Consolidated Thompson-Lundmark Gold Mines Limited

Consolidated Thompson-Lundmark Gold Mines Limited

April 04, 2006 10:42 ET

Consolidated Thompson Completes Bankable Feasibility and Confirms Economic Viability of Bloom Lake Iron Deposit

TORONTO, ONTARIO--(CCNMatthews - April 4, 2006) - Consolidated Thompson-Lundmark Gold Mines Limited (TSX VENTURE:CLM) ("CLM" or "the Company") is pleased to announce that it has received the final report of the Full Bankable Feasibility Study ("the Study") on the Bloom Lake Iron Ore Deposit from Breton Banville & Associates ("BBA"), an international engineering firm based in Montreal with expertise in mining and mineral processing. The report was authored by Mr. Patrice Live, Ing. and Martial Cote, Ing. both qualified persons as defined in National Instrument 43-101. The details of the Study will shortly be filed and accessible on SEDAR.

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 Mount-Wright iron mining operation of Quebec Cartier Mining Company.

- Bloom Lake to produce 5 million tonnes of high-quality 66% concentrate per year beginning in 2008

- Pre-production Capital Cost (including working capital) US $ 178 million

- Pre-tax IRR 40.2% using US $ 0.59 per iron unit equivalent to revenue price of US $ 38.94/tonne of concentrate

- Total operating cost US $ 20.96 / tonne concentrate

- NPV (at 5% Discount rate) of US$ 888 million

- Total undiscounted Cash Flow of US $ 1.6 billion

- Forecasted yearly Cash Flow exceeding US $ 90 million

- Payback of 2.2 years

Brian Tobin, the Chairman of the Board stated, "We are very encouraged by these results. With a stronger Net Present Value than October's Scoping Study (BBA, Montreal), the bankable feasibility study demonstrates the value and reality of the Bloom Lake Project and its great potential to advance into a strong, low cost iron ore producer."

Richard Quesnel, President & CEO stated, "The results of the feasibility study indicate that the Bloom Lake project presents potential for a very attractive return to its shareholders, and the Company now plans to initiate project financing in the near future."


The positive Bankable Feasibility Study, which has been delivered to the Company, is based on an output scenario of 5 million tonnes of iron concentrate per year. The level of accuracy of the study is considered to be +/- 15%.

The Feasibility Study assumes that Commercial production would commence in late 2008 and the mine has a life exceeding 40 years. The economics were based on a 20 year mine plan. The following results were obtained on a pre-tax basis:

IRR 40.2%

NPV @ 0% $1,569.9 million
NPV @ 5% $ 888.2 million
NPV @ 10% $ 533.0 million
NPV @ 12% $ 439.4 million
NPV @ 15% $ 331.7 million

- Payback Period: 2.2 years

The study assumed the following major parameters:


- A commodity price of US $ 0.59/iron unit equivalent to revenue prices of US $ 38.94 / tonne of concentrate produced (US $ 0.59/iron unit x 66 units/tonne of concentrate containing 66% Total iron). The pricing used represents the average selling price of iron ore concentrate (FOB Sept-Iles, Quebec) over the last three years. Current prices are quoted at US $ 0.667/iron unit equivalent to revenue prices of US $ 44.02 / tonne of concentrate sold.

Operating costs:

- Average mining cost: US $ 1.67/tonne mined

- Average crushing and processing cost: US $ 3.85/tonne concentrate

- Rail transport and Port Handling: US $ 8.65/tonne concentrate

- General and Administration: US $ 1.13/tonne concentrate

Total Operating Cost US $ 20.96/tonne concentrate

Capital expenditures:

- Pre-production costs from the beginning of 2006 up to the end of 3rd quarter 2008 are estimated to be US $ 165.4 million. Capital costs after start-up of mining and processing operations includes:

- 2008: Pre-stripping and site preparation (US $ 1.3 million)

- 2009: Magnetite Plant, site preparation and tailings (US $ 76.1 million)

- 2010: Magnetite Plant and tailings final phase (US $ 15.0 million)

Total capital expenditures (2006-2010) amount to US $ 257.8 million excluding working capital of US $ 12.1 million. Sustaining capital starting in 2010 amounts to approximately US $ 2.0 million per year.

Mineral Resources and Mineable Reserves:

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) tonnes 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
Meas. + 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

Mining Reserves By Ore Class
(Cut-off grade equals 15% Fe)

Total Magnetite
Classification Tonnes Fe Fe CaO MgO Magnetite
(million) (%) (%) (%) (%) (%)
Proven 463.4 30.1 7.6 2.2 2.1 10.5
Probable 116.2 29.7 7.7 2.3 2.1 10.7
Total Ore 579.6 30.0 7.6 2.3 2.1 10.5
Total Waste

Mine reserves were established using the following parameters:

- Mining recovery: 100%

- Processing weight recovery: 41.0%

- Overall pit wall slope angle: 48 degrees (including allowance for ramp)

- Dilution: Built in Watts, Griffis, McOuat block model

- Cut-off grade 15% Fe

An optimized pit design generated total in-pit proven and provable reserves of 579.6 million tonnes at 30.0% Total Fe and a stripping ratio of 0.97 tonne (inferred + waste)/tonne ore.

Other parameters:

- The initial capacity of the plant without the magnetite recovery circuit is 5.0 million tonnes per year of concentrate from a single line. With the magnetite circuit commissioned in 2010, it will increase to 5.2 million tonnes per year of concentrate. The plant design will account for possible future expansion.

- The weight recovery as concentrate is 41%.

- The iron minerals are liberated at 410 microns (35Mesh).

- The % Si degrees2 in the concentrate is 5% or less.

- Grinding power requirement is estimated at 4.3 kWh/t.

- Half of the magnetite is recovered in the spiral concentrate plant and half in the magnetite plant.

- Concentrate will be dried to less than 2% moisture in the winter months to avoid freezing in the railcars.

- The plant will operate 365 days a year with 90% equipment utilization.

Sensitivity Analysis

A sensitivity analysis indicated the project economics are expected to be strong with average iron ore price assumptions 11.5% below current prices ($US0.59/iron unit versus $US0.667/iron unit). (See figure 1 below).

NOTE: Figure 1 is available on CCNMatthews' website at:

The Feasibility study was based on available information contained in but not limited to the following reports and documents:

- 43-101 review of Bloom Lake Mineral Resources by Watts, Griffis and McOuat Ltd.

- A process flowsheet of a similar existing operation.

- Commercially available database and cost models, i.e. Infomine, Western Mine Engineering Inc., etc.

- Canadian Milling Practice, Special Vol. 49, CIM.

- Metallurgical test work performed in 1976 to be confirmed by current work by Watts, Griffis, McOuat and SGS Lakefield.

- An environmental context report prepared by Roche

Consolidated Thompson-Lundmark Gold Mines Ltd. is an exploration and development company. With a positive bankable feasibility study and the quality and size of the Bloom Lake deposit, it reflects the Company's ability to advance the project and other opportunities in the Iron Ore area. The Company has approximately 17.2 million shares outstanding and trades on the TSX Venture Exchange under the symbol (CLM). Any further information can be accessed at the company's website at


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