en.Wedoany.com Reported - Canadian exploration company MetalQuest Mining (TSXV: MQM; US-OTC: MQMIF), after completing a technical gap analysis, plans to update the 2015 feasibility study for the Lac Otelnuk iron ore project located in northern Quebec and is intensifying its search for a joint venture partner.
The Lac Otelnuk iron ore project is situated in the Labrador Trough in northern Quebec, approximately 165 kilometers northwest of Schefferville. Headquartered in Vancouver, Canada, MetalQuest Mining was founded in 1988 and is an exploration-stage mining company involved in the acquisition, exploration, and development of iron, zinc, lead, copper, silver, and gold mineral properties. The company holds a 100% interest in several mineral claims, including the Lac Otelnuk Iron Project and the Superior Iron Project. As of 2024, MetalQuest Mining has invested over US$150 million cumulatively in the Lac Otelnuk project. The project holds a historical measured and indicated resource of 20.64 billion tonnes, with an average total iron grade of 29.8%, capable of producing iron concentrate with a grade exceeding 68.5% after beneficiation.
High-purity iron ore was added to the Canadian government's Critical Minerals List in 2024 and is similarly classified in Quebec, enhancing the value of large-scale deposits in the Labrador Trough. The 2024 edition of Canada's Critical Minerals List includes 34 minerals, with high-purity iron, phosphorus, and metallurgical silicon being newly added. High-purity iron ore is recognized for its use in green steel production and decarbonization, serving as a key raw material for the low-carbon transition in the steel industry. Harry Barr, Chairman and CEO of MetalQuest Mining, who has over 35 years of management experience in the mining industry, stated during the PDAC convention that this project is one of the largest iron ore projects globally. He indicated that bringing in a major partner could accelerate the development of further project phases.
The Lac Otelnuk project is adjacent to iron ore projects held by companies such as Rio Tinto (ASX, LSE, NYSE: RIO), Tata Steel of India, ArcelorMittal (NYSE: MT), Champion Iron (TSX: CIA, ASX: CIA), and Vale (NYSE: VALE). According to the feasibility study completed in 2015, the project has proven and probable reserves of approximately 4.9 billion tonnes, a designed mine life of about 30 years, an after-tax net present value (at an 8% discount rate) of approximately US$5.24 billion, an internal rate of return of about 13%, and total capital expenditure estimated at around US$14.2 billion. The next steps for the project will focus on product studies, evaluation of transportation and power solutions, and determining the optimal development path.
The project's history dates back to its early development stage by the Canadian mining company Adriana Resources. Around 2011, China's Wuhan Iron and Steel Group participated in project investment through a joint venture company, but progress stalled due to a significant drop in iron ore prices. After several adjustments to the project's ownership, it was acquired by MetalQuest Mining in 2022. The Lac Otelnuk project is considered one of the largest undeveloped iron ore deposits in North America. Driven by critical minerals policies, its strategic value as a raw material for green steel is becoming increasingly prominent, which explains MetalQuest's current active efforts to restart partnership negotiations.
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