The LabMag Property is located in the western margin of the Labrador Trough, adjacent to Archean basement gneisses. The Labrador Trough, also known as the LabradorQuebec Fold Belt, extends for more than 1,000 km along the eastern margin of the Superior Craton, from Ungava Bay to Lac Pletipi in Quebec. The belt is about 100 km wide in its central part and narrows considerably to the north and south. The Grenville Front crosses the southern part of the Labrador Trough.

The Deposit consists of magnetite Banded Iron Formation (“BIF”) of the Lake Superior type. BIFs are sedimentary rocks composed of alternating mm- to cm-scale beds of quartz (chert or jasper) and iron oxides (predominantly magnetite and hematite).

The taconite at LabMag consists mostly of alternating small-scale (mm to cm) beds of
recrystallized chert or jasper and massive or disseminated magnetite. Magnetite is the predominant iron oxide mineral, while hematite and martite occur in subordinate amounts. Gangue minerals are represented by iron silicates (minnesotaite and stilpnomelane), iron carbonate (siderite) and manganese carbonates (rhodochrosite and kutnahorite).

This iron formation has been explored by diamond drilling over a strike length of 9.5 km (Blocks A, B and C) and it extends beyond the northwest and southeast Property boundaries.

The mining method selected for the Project is conventional truck and shovel. Vegetation and topsoil will be cleared using a mining contractor and be carried out with a fleet of dozers, small excavators and articulated haul trucks ahead of the mining operation.

Suitable organic material will be stockpiled for future reclamation use. Overburden will then be stripped using a fleet of excavators and hauled to the overburden dump. The ore and waste rock will be mined with 15 m high benches, drilled and blasted then loaded with large mining shovels into a fleet of rigid frame trucks which will haul the material either to the waste dump, the Class 2 ore stockpile or the primary crushers.

During peak production, the total number of 363-tonne haul trucks is expected to reach 35, along with seven (7) shovels, ten (10) production drills and a large fleet of support and service equipment.

The process plant is designed to treat approximately 88 Mt/y of taconite ore (dry basis), at a DTWR of 27 % and Fe grade of approximately 30 %. Any hematite present will not be recovered. Operating 358 days per year 24 hours per day with at an availability of 92 %, (at a nominal rate of 10,026 t/h) the process plant will recover a nominal 22 Mt/y of concentrate (2,491 t/h, dry basis after flotation). The concentrate product quality will be such that DR grade and BF grade pellet feed can be produced as needed. The plant design is based on a 25-year plant life.

The basic process flow sheet consists of primary and secondary crushing and screening circuits feeding HPGRs for dry comminution. After cobbing, the liberation of the iron bearing mineral (magnetite) is completed in a wet grinding circuit. Concentration stages include besides cobbing, roughing and finishing with low intensity magnetic separators. The undersize final concentrate is sent to the thickener and the slurry storage tanks or to the flotation plant for low silica.