New Millennium Iron Corp
. (TSX: T.NML
) said that Tata Steel Minerals Canada, in which NML has a 20% interest, advises that it has entered into a confidential agreement for the sale of TSMC's iron ore production to the Iron Ore Company of Canada (IOC).
The contract shall allow TSMC to commence shipment of its products in the current year.
According to the New Millennium Iron press release
, under the confidential sales agreement with IOC, TSMC's production will be sold by IOC's marketing organization for delivery to several markets, the details of which will be negotiated between the two parties.
In 2012, TSMC produced approximately 300,000 million tonnes of 62% iron direct shipping ore sinter fines from a portable screening plant. Production resumed in mid-June this year and is expected to continue until October.
Meanwhile, construction of the Timmins Processing Plant is progressing and it is now planned to start the plant in November producing direct shipping ore grade sinter fines using the crushers and screens and drying for winter shipping. The wet processing and upgrading section of the plant is currently expected to be operational in the first quarter, 2014. The target is to ship about 2.0 million tonnes in 2013.
"This is an important step for NML as we transform ourselves from being a developer to a producer by entering the iron ore market,” said Dean Journeaux, President and CEO.
“This interim sales agreement with IOC will enable TSMC to continue production until TSMC can use the new multi-user dock now being constructed by the Port of Sept-Iles at Pointe-Noire, Quebec.”
IOC is Canada's largest iron ore producer from its mines located in Western Labrador and is a leading global supplier of iron ore pellets and concentrates.
NML controls the emerging Millennium Iron Range, located in the Province of Newfoundland and Labrador and in the Province of Quebec, which holds one of the world's largest undeveloped magnetic iron ore deposits.
On Thursday, NML rose 8.8% and was trading at $0.74 a share. The company had a market cap of $133.4 million, based on 180.2 million shares outstanding.