Lac Lamle off to a good start

Fancamp Exploration’s (FNC-V) first resource estimate on its Lac Lamêlée South iron project in the Fermont mining district of Quebec has outlined 520 million tonnes grading 39.5% iron at a 22% iron cut-off grade—about half way to the magic 1 billion tonne mark characteristic of iron ore deposits in that part of the country, president and chief executive Jean LaFleur says.

“It’s currently in the smaller range of these other deposits up there but still it’s a start,” LaFleur says. “I’m hoping in the end we’ll get closer to a billion tonnes … that is really the threshold for deposits in the area—it’s a magic number…then you can do a reasonable mine life, a reasonable tonnage annually and that’s what you’re looking for.”

The next step, LaFleur says, is to complete a scoping study and metallurgical work.

The Lac Lamêlée South project covers 1,524 hectares or 15 sq km in northeastern Quebec, near the border of Newfoundland and Labrador, about 50 km south of the city of Fermont. It sits 10 km southwest of Champion Iron Mines’ (CMH-T) Consolidated Fire Lake North project with reserves of 464.6 million tonnes at more than 32% iron and 10 km to the northwest of ArcelorMittal’s (MTN-N) Fire Lake mine with 341 million tonnes grading 33% iron.

Lac Lamêlée South is situated in the southern segment of the Labrador Trough, which consists of early Proterozoic sedimentary and volcanic rocks highlighted by iron formations that have been mined since 1954.

Fancamp’s business model, LaFleur says, includes a range of options including finding a strategic partner or forming a joint-venture to advance the project, optioning it, getting a royalty on it,  or selling it outright.  

“It’s a really good approach and you don’t have to go to the market to finance—that’s the key right now,” he says. “Stocks are so low you have to look at alternative ways of raising money and this isn’t a bad way of doing it. If we could get a joint-venture partner after the scoping study, it would be perfect.”

And LaFleur, who recently attended the Mines and Money show in Hong Kong in March, says he doesn’t share the current pessimism about global growth and demand for commodities that seems to permeate mindsets in the West.

“The Toronto market is so depressed, bankers and analysts say nothing works. But you go over there, and they’re looking at acquiring ground and having strategic positions. The Chinese economy is down, but it’s still growing at 7-8%, and I think they’re still on the hunt for acquisitions…I still see them as being very aggressive in their approach to acquiring properties and projects.” Add to that other Asian economies including Japan, Korea and India that are looking for raw material and the outlook is quite bright, he ventures.

When asked to comment on a research note today from Macquarie Equities Research claiming there are signs of deterioration in the iron ore market that raise “the risk that a China destocking event could occur sooner than later,” LaFleur says he doesn’t believe any of it.

“Maybe I’m a bit of a contrarian but if I’m being called or asked by Asian interests who say they’re interested in looking at my properties for acquisition … there’s a disconnect between the North American markets and the raw data for those in the field. China has got to go elsewhere to get what it needs…if you have a big project, and it’s well situated, and it’s got good quality ore, you’re going to find buyers for it, I don’t care where you are.”