Last month, Iron Investing News had the chance to speak withÂ Sandy Chim, CEO of Century Iron MinesÂ (TSX:FER). The CEO spoke about Century Ironâ€™s activities, the future of the iron market and important factors for investors to consider when looking at iron ore companies.
Chim began by speaking about Century Ironâ€™s Joyce Lake project, which the company isÂ moving forward to a bankable feasibility study following a preliminary economic assessment published roughly one year ago. He is pleased with recent results, which increased the projectâ€™s mineral resource estimate by 143 percent, putting Joyce Lakeâ€™s iron deposit at the high grade sought after at market.
Additionally, he discussed Century Ironâ€™s offtake agreements withÂ Wuhan Iron & Steel andÂ China MinMetals, noting that it was very important to the company to have 60 to 70 percent of its product presold. Chim also noted that the companies have agreed to buy Centuryâ€™s iron ore at market prices, rather than getting a discount at current low rates â€” an important factor to note for those with a positive outlook on iron.
In terms of the iron ore market at the moment, Chim admitted thatÂ â€ťthe iron ore spot price is not performing.â€ť He cited a buildup of inventory in Chinese ports as contributing to the cause. However, he also stated,Â â€ťI think there is a healthy long-term outlook for iron oreâ€™s spot price.â€ť Specifically, Chim said he sees India’s upping of its iron ore imports as a positive development and has â€śa lot of hopes for the Indian market.â€ť
Finally, Chim talked at length about what investors should consider when investing in iron. He drew attention to the importance of considering users, stating that when looking at a projectâ€™s deposit, it is important to ask the question, “will the grade and quality of iron in this deposit work well for the blast furnaces in our market?” Chim also noted that due to the large-scale nature of iron ore projects, it is common for talented teams management teams to be brought together very quickly; that said, getting them â€śto work together well to deliver a project is another matter. If a team has historical experience working together as a group, that will bring a better chance of success.â€ť
The CEO finished by saying that â€śthe deposit, the management team and the iron ore spot price are the three most important factors that investors should look at before taking the plunge and investing in the sector.â€ť
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure:Â The Investing News NetworkÂ does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts.Â The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do notÂ constituteÂ investment advice. All readers are encouraged to perform their own dueÂ diligence.Â