Consolidated Thompson-Lundmark Gold Mines Limited
TSX VENTURE : CLM

Consolidated Thompson-Lundmark Gold Mines Limited

November 07, 2005 08:00 ET

Consolidated Thompson Receives Positive Scoping Study On Its Bloom Lake Iron Deposit & Initiates Full Bankable Feasibility

TORONTO, ONTARIO--(CCNMatthews - Nov. 7, 2005) - 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 Scoping Study ("the Study") on the Bloom Lake Iron Ore Deposit from Breton Banville & Associates ("BBA"). The Company is immediately initiating a full bankable feasibility to be completed on or before January 30, 2006.

HIGHLIGHTS

On June 29, 2005, the Company announced the results of the recently completed 43-101 review of the Bloom Lake Iron Ore Property resources carried out by Watts, Griffis and McOuat Limited ("WGM"). WGM estimated a measured resource of 488.5 million tonnes grading 29.91% Total Fe and an indicated resource of 149.2 million tonnes grading 29.29% Total Fe totaling 637.7 million tonnes grading 29.76% Total Fe. In September 2005, the Company mandated BBA to undertake a scoping level study for the development of the Bloom Lake Iron Ore Project. BBA is an international engineering firm based in Montreal with expertise in mining and mineral processing.

The Company is pleased to announce that it has received positive results and that the details of the Study will shortly be filed and accessible on SEDAR. The report was authored by Mr. Patrice Live, Eng. and John Dinsdale, Eng., all qualified persons under National Instrument 43-101.

The Study was 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 +/- 30% with order-of magnitude capital and operating cost estimates.

The Scoping Study assumes that Commercial production would commence in 2008 and would continue for 20 years out of a total mine life of 40 years. The following results were obtained on a pre-tax basis:

- Internal Rate of Return: 45.4%

- Net Present Value @ 0% discount: $US 1006.4 million

- Net Present Value @ 5% discount: $US 582.5 million

- Net Present Value @ 10% discount: $US 358.4 million

- Net Present Value @ 12% discount: $US 298.8 million

- Net Present Value @ 15% discount: $US 229.5 million

- Payback Period: 2.5 years

The study assumed the following major parameters:

Revenues:

- A commodity price of $US 0.54/Fe unit equivalent to revenue prices of $US 36.18 / tonne of concentrate produced

Operating costs:

- Average mining cost: $US 1.38/tonne mined

- Average crushing and processing cost: $US 9.21/tonne concentrate

- Rail transport from mine site to port: $US 6.25/tonne concentrate

- Port handling and ship loading: $US 0.84/tonne concentrate

- General and Administration: $US 0.70/tonne concentrate

- Others (environment...): $US 0.20/tonne concentrate

Capital expenditures:

- Pre-production costs from the beginning of 2006 up to the end of 1st quarter 2008 are estimated to be $US 120.4 million. Capital costs after start-up of mining and processing operations includes:

- 2008: Working Capital ($US 5.0 million)

- 2008: Tailings disposal phase 2 ($US3.2 million).

- 2008: Infrastructures expansion ($US10.1 million).

- 2009: Magnetite plant and Rail sidings / Port expansion ($US13.9 million).

- 2010: Additional rail sidings / Port expansion ($US 4.0 million)

Total capital expenditures (2006-2010) amounts to $US 159.7 million. It includes potential savings of $US 18.1 million on purchase price of used and foreign-sourced equipment. Sustaining capital starting in 2010 amounts to $US 3.0 million per year.

Mining:

An optimized pit design was established using the following parameters to generate total in-pit measured and indicated resources of 570.5 million tonnes at 29.9% Total Fe and a stripping ratio of 0.97 tonne (inferred + waste) / tonne ore:

- Mining recovery: 100%

- Processing weight recovery: 38%

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

- Dilution: Built in WGM block model

Other parameters:

- The initial capacity of the plant without the magnetite recovery circuit is 4.4 million tonnes per year of concentrate from a single line. With the magnetite circuit commissioned in 2010, it will increase to 5.0 million tonnes per year of concentrate. The plant design will account for possible future expansion.

- The weight recovery as concentrate is 38% (1976 Report).

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

- The % SiO2 in the concentrate is 3% or less.

- Grinding power requirement is estimated at 3.5 kWh/t.

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

- 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.

The scoping study was carried out using available information contained in but not limited to the following reports and documents:

- 43-101 review of Bloom Lake Mineral Resources by WGM.

- 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 WGM and SGS Lakefield.

- An environmental context report prepared by Roche

Richard Quesnel, CLM's President stated:

"A very robust rate of return, a short payback period, moderate capital requirements and quality resources, shows that the Bloom Lake project presents a very attractive potential both in technical feasibility and in economical viability.

With these results and the successful signing of a provisional agreement with Prosperity TCMA Mining Limited to finance Bloom Lake and purchase its iron ore production for China, we are very pleased to launch a formal bankable feasibility study to be completed on or before January 30, 2006. "

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

Today, the Company announces that it has received positive results on the scoping study of its Bloom Lake Iron Ore deposit carried out by Breton Banville & Associates (BBA) and that it is initiating a full bankable feasibility study to be completed on or before January 30, 2006.

Richard Quesnel, Eng., is Consolidated Thompson's Qualified Person as defined in National Instrument 43-101 who has reviewed and verified the scientific and technical mining disclosure contained in this news release.

Consolidated Thompson-Lundmark Gold Mines Ltd. is an exploration and development company. With a positive scoping study, the quality and size of the Bloom Lake deposit and the signing of a provisional agreement with an end-user group reflects the Company's ability to advance the project and other opportunities in the Iron Ore area. The Company has approximately 14 million shares outstanding and trades on the TSX Venture exchange under the symbol (CLM).

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OF THIS NEWS RELEASE.

Contact Information

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