Labrador Iron Ore Royalty Corporation

SCOTIABANK GBM MINING CONFERENCE
November 27, 2012
Labrador Iron Ore Royalty Corporation
Bruce Bone
President & CEO
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Corporate Structure
Shareholders
Common
Shares
LIORC
9.56%
Equity
100%
Equity
HollingerHanna
Royalty
7%
5.54%
Equity
IOC
Fee
10¢/tonne
IOC has a long history in Newfoundland &
Labrador and Quebec
1954 - Completion of QNS&L line &
first Schefferville ore
IOC External
Relations Office
1962 - Commissioning of Labrador
City Operations
1967 - Labrador City pellet plant
expanded
1981 - Sept-Iles pellet plant closed
1982 - Schefferville operation closed
1998 - IOC becomes a 100%
merchant supplier
2000 - Rio Tinto becomes majority
shareholder
2008 - Expansion by 50% concentrate
initiated
IOC Head Office
2011 - Announcement to study
options for expansion to
50Mtpa
2012 - Concentrate Expansion Project
Phase 1 commissioned.
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4
Providing significant and sustainable benefits to
the communities in which it operates
• Mining and Processing operations in Labrador City
(NFLD).
• Port & Rail in Sept Iles (QC).
• Corporate presence in Montreal and St. Johns.
• Approximately 2500 employees.
• Sustainable Development
• Economic
• Environmental
• Social
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IOC integrated mine to port production system
Mine
Plant
•
Expandable high quality resource base with
significant exploration potential
•
Ore upgraded often in excess of 65% Fe
concentrate
Majority of concentrate converted to pellets
•
•
Product transported to port via ~400 km
QNS&L railway
•
•
Year round, expandable deep water port
Vessel capacity currently 255kt
Rail
Port
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Mining Operations
• Three active pits: Luce, Humphrey West and Sherwood
• Annual material movement
•
2011 = 65Mt,
•
2012 forecast = 77Mt.
H. South
Sherwood
(Active)
H.West
(Active)
• Mining Equipment
Loraine
•
9 electric drills
•
6 P&H electric shovels
•
2 production loaders
•
36 Komatsu haul trucks1
− 21 x 210 tonne 830E’s
− 15 x 270 tonne 930E’s
1
As at 23 July 2012
H.Main
Luce
(Active)
3Pkt
2Pkt
Spooks
PODS
Conveyor
4Pkt
ATO
Ore Delivery System from Mine to
Processing Plants
Automated Train Operation (ATO)
• Hauls ore 8 - 13 km from mine to concentrator.
• 7 automated electric trains - 20 cars carrying
100 tonnes each.
•3 loading pockets across the mine.
Parallel Ore Delivery System (PODS)
• Dedicated crusher
• 6 km overland conveyor direct to processing.
• Debottlenecks ore delivery system.
• Proximity to current and future active pits
reduces truck cycle times.
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Concentrator and Pellet Plant
• Annual concentrator capacity
of 22Mt post Concentrate
Expansion Project Phase 1
(CEP1).
Crusher
• Annual pellet plant capacity
of 12.5Mt.
• Flexibility to adjust product
mix in response to market
conditions.
• Value adding process
attracts significant market
premiums.
Pellet Plant
Concentrator
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418km railway (QNS&L) connects Labrador City
operations to the Quebec coast
• 100% IOC owned and operated, federally regulated.
• System hauls 24Mt of product from Labrador to
Sept-Iles annually1.
• Current fleet capacity of approximately 35Mt
•
Fleet is sized for purpose.
•
IOC’s fleet includes 60 locomotives and
1,380 ore cars.
•
Each train is 240 cars long, 2.5km.
• Rail capacity ~ 80 – 85Mt
•
Rail line has 27 sidings and no access roads.
• The only single operator train system in North
America (since 1997).
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2011 Actual - Includes third party product
IOC’s deepwater port at Sept-Iles is accessible
year-round
• 100% IOC owned and operated.
• Port facilities accommodate large ships all year
round – ship draft of up to 17.7m
• Smaller vessels service the St. Lawrence seaway
during the summer.
• Port capacity approximately 28Mt
• Expansion potential to ~200Mt.
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Markets
IOC Customers by Shipment - 2010
• High quality supplier with stable customer base.
• Recent investments in the operations have
improved reliability of supply.
29%
49%
•
Steady increase in concentrate fines for
sale.
•
Long-term contracts secured.
22%
• Well positioned & competitive in all pellet markets.
IOC Customers by Shipment - 2011
37%
41%
Europe
North America
22%
Asia / Pacific / Middle East
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IOC Products
IOC Concentrate
• Recognised for its low alumina, very low
phosphorus
IOC Pellet grades
• Acid: Standard and Low Silica
• High grade Direct Reduction
• Fluxed
Value is Supported
•
Trend toward higher quality manufacturing and
consumer steels
•
Increasing carbon and energy prices
•
Exit of Chinese concentrates
•
VIU differentiation through low Alumina and
Phosphorus
IOC Pellets
IOC Concentrate
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
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Delivery improvement initiatives and executing expansions
will drive IOC performance in 2012 and beyond
• Integrated planning approach to
delivery will optimise performance in
2012
IOC concentrate capacity
(Mtpa,100% basis)
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Potential *
Under Study *
Incremental Capacity
Existing Capacity
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• CEP 1 currently being commissioned
and will take capacity to 22Mtpa
− Delivering increased grinding capacity
and removal of bottlenecks in the ore
delivery system
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25
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23.3
− Results in a more robust production
system to variations in ore quality
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• First production from CEP 2 expected
Q1 2013
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5
0
Current
CEP1
* Indicativepotential capacity
CEP2
CEP3 Potential
• Resource base and infrastructure can
support a much larger business
Phase 1 Concentrate Expansion Project
4Mt additional concentrate capacity
• Revised Capex of US$628M
• Dedicated crusher.
• Parallel Ore Delivery System (PODS)
•
6km overland conveyor - 35Mtpa
capacity
•
Debottlenecks ore delivery system
•
Reduces haul truck cycle time
• Additional Autogenous Grinding mill.
•
Increases total grinding capacity.
• Decreases production sensitivity to variations in
ore quality.
• System is currently in final commissioning.
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Phase 2 Concentrate Expansion Project
1.3Mt additional concentrate capacity
• Capex of US$277M
• Additional spiral lines and expanded magnetite plant delivering increased recoveries.
• Includes additional mining equipment and rolling stock.
CEP1 ‐ Ore StorageBarn
CEP1 – 4th AG Mill
CEP2 – MagnetitePlant &
additionalspirals
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IOC has sufficient mineral inventory to support
future expansion options
• Vast mineral inventory.
• All reserves, resources
yield saleable product with
similar high quality
Legend
IOC Mining Leases
IOC Exploration Licences
RTX Exploration Licences
Third party Exploration Licenses
Reserves & resources
chemistry.
• Mineral inventory is
proximal to existing IOC
infrastructure.
IOC Processing Facility
Labrador City
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Selected Statistics
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(CDN$ 000)
2011
2010
2009
2008
2007
IOC Sales
2,443
2,522
1,144
2,200
1,015
Sales in
Tonnes
Royalties
Received
(LIORC)
Dividends
Received
(LIORC)
13.6
15.1
14.2
15.1
13.4
160,730 162,724 75,489 161,403 66,118
60,167
73,965
8,200
77,924
18,844
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Conclusion
• IOC has substantial upside potential for
future growth.
• Quality of product positions it
strategically for the future.
• Expansions are currently underway and
in commissioning.
• As a result, LIORC has substantial upside
potential to its royalty revenue due to
increased IOC sales. Increased IOC
profitability will be positive for future IOC
dividends.