Shares of Century Iron Mines (TSE:FER), an iron ore explorer with assets in the Labrador Trough region, rose more than 7% Friday after it announced its third fiscal quarter results, ending last year with cash and equivalents of around $44 million.
The company, which is aiming to become a major iron ore producer, is one of the largest iron ore companies in Canada, in terms of number of claims by area. It has 6,493 claims and titles, covering some 198,779 hectares in the provinces of Québec and Newfoundland & Labrador.
It has interests in four iron ore projects, none of which yet generate revenue. The Duncan Lake project is located in western Québec, while three others, Sunny Lake, Attikamagen, and the Altius Properties, are located in the Labrador Trough region of Québec and Newfoundland & Labrador.
At its Duncan Lake property last year, the company completed phase II drilling and released an updated NI 43-101 technical report. Century says it intends to use the drilling results for a preliminary economic assessment (PEA) currently planned for this year.
The project, using a 16-per-cent iron cutoff, has a resource of 1.05 million tonnes, grading about 24 per cent iron, for 256,349 tonnes of contained ore in the measured and indicated category; and 563,000 tonnes, grading 24.7 per cent iron, for 139,061 tonnes of contained iron in the inferred category.
It also last year announced NI 43-101 compliant initial mineral resource estimates on its Hayot Lake and Rainy Lake properties.
The Hayot Lake iron deposit in Quebec, which forms part of the Attikamagen project, has a resource of over 1.7 million tonnes, grading 31.25 per cent iron, for 538,438 tonnes of contained iron in the inferred category - using a 20-per-cent iron cutoff.
Using the same cutoff, Rainy Lake, part of its Sunny Lake project, has a resource of over 7.2 million tonnes of ore, grading 30.18 per cent iron, for 2.19 million tonnes of contained iron in the indicated category; and over 8 million tonnes, grading 29.86 per cent iron for 2.59 million tonnes of contained iron in the inferred category.
Century has two blue-chip Chinese investors in WISCO (Wuhan Iron & Steel Company) and MinMetals, with the deep pockets required to unlock the potential of the company's assets.
WISCO is the fourth-largest steel producer in China, controlling 3 billion tonnes of overseas iron ore resources.
Earlier this month, eResearch gave the iron ore explorer a "speculative buy" rating, saying that more drilling, resource estimates and some feasibility studies "should all increase investor focus" on the company's share price potential.
eResearch analyst Bob Weir said that the outlook for steel demand in China has improved recently, which should keep iron ore consumption at higher levels, resulting in the recovery of iron ore stocks.
Its share price was up 7.5% Friday, or by 4 cents, to 57 cents late Friday.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.