IOC expects contract for Wabush 3 to be awarded by the end of March
The Iron Ore Company of Canada (IOC) expects to announce the successful bidder on the contract for the new Wabush 3 open pit mine by the end of March.
Company attributes turnaround to a number of factors, including rising price of iron ore
On Feb. 28, Labrador Iron Mines Holdings Limited (LIM) reported its financial results for the quarter ending in December and the news is good.
According to a release from the company, it reported a net income of $72.1 million or $0.55 per share, mainly attributable to a restructuring recovery of $47.1 million and reassessed value of their assets equaling $25.5 million.
The company had been working under the Companies' Creditors Arrangement Act, which allows corporations the opportunity to restructure their company to avoid bankruptcy.
Under that legislation, a company submits a Plan of Arrangement, which LIM did on Dec. 16 of last year. Following that, claims totaling approximately $75 million (in addition to approximately $293 million of intercompany claims) were extinguished in exchange for equity and most of the Company’s debts disappeared.
The $25.5 million came from a management assessment of the company’s mineral property based on the value of the company’s projects. The rising price of iron ore was another factor, LIM said.
“The price of iron ore doubled during 2016, reaching a two-year high of USD $80 per tonne in November,” the release said. “Since the new year prices have moved higher, almost touching the USD $100 per tonne mark, the highest level since mid-2014. By February 2017, the price of iron ore was up more than 90 per cent from the near decade lows experienced in December 2015.”
They are now free of the CCAA proceedings, debt free and with ownership and value of business and core assets maintained.
The release said they are now positioned to develop mining operations from the Houston direct shipping iron ore project when market conditions permit, subject to completion of development financing.
LIM worked in the James Mine and Silver Yards plant in 2011 and is engaged in the mining, exploration and development of direct shipping deposits located in the Schefferville/Menihek region of the Labrador Trough. They stopped work in 2014 due to the dipping price of ore.