A look at iron ore stocks continuing to make progress despite the tough iron ore market.
The iron ore price hasn’t fared well over the past few years, and this year dropped as low as US$44 per tonne; it’s hovered around the US$50 mark throughout Q3.
Oversupply from industry giants Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO), Vale (NYSE:VALE), BHP Billiton (ASX:BHP,NYSE:BHP,LSE:BLT) and Fortescue Metals (ASX:FMG) has been a major cause of the price drop. The companies are trying to muscle higher-cost competitors out of the market.
Unsurprisingly, some iron ore companies have faced hardship this year due to price pressure — both Alderon Iron Ore (TSX:ADV,NYSEMKT:AXX) and Iron Ore Company of Canada (IOC) are facing uncertainties. However, a few junior and mid-cap iron ore stocks have managed to stay afloat through these difficult times. With that in mind, the Investing News Network has put together a list of some the iron ore stocks that continue to progress.
Cliffs Natural Resources
Cliffs Natural Resources (NYSE:CLF) began restructuring in January, looking to sell its Bloom Lake mine in Quebec and focus on its US assets. Cliffs also sold its chromite assets in Northern Ontario to Noront Resources (TSXV:NOT) in March.
While the strategy might seem fairly straightforward, the company hit a few snags along the way, including a lawsuit from the Bank of Nova Scotia (TSX:BNS) because of an alleged breached loan agreement. That said, Cliffs has seemingly turned things around, and reported significant cost reductions in Q3. The company reduced its US iron ore cash production costs to $49 per tonne, a 16-percent decrease from Q3 2014, and recorded net income of $6 million compared to a net loss of $6.9 billion year-on-year.
Ferrum (ASX:FCR) is focused on its Moonlight project in Limpopo, which has a JORC compliant resource of 307.8 million tonnes at 26.9 percent.
In October, the company announced that it will begin the first phase of a bankable feasibility study in the fourth quarter of 2015. Ferrum signed an agreement with Business Venture Investments to form a joint venture for the completion of the study in exchange for up to a 43-percent equity interest in the project’s holding company, Ferrum Iron Ore.
Atlas Iron (ASX:AGO) has iron ore operations in the Pilbara region of Western Australia, including the 100-percent-owned Wodgina project, the Abydos mine and the Mt Webber mine.
In October, Atlas Iron announced a production ramp up at its Pilbara operations four months ahead of schedule to 14 million to 15 million tonnes per year and lowered cash costs for the third quarter.
And despite the difficulties in the iron ore market, the company has managed to secure sales. In late September, Atlas signed a key new iron ore sales agreement with a major international trading group for 5 million tonnes per annum of Atlas standard fines for up to two years.
Champion Iron (TSX:CIA) is focused on developing projects in the prolific Labrador Trough, with resources in Quebec and Newfoundland and Labrador. The company’s flagship Fire Lake North project has a total resource of 3.4 billion tonnes; 1.2 billion tonnes outlined in the Fire Lake North east pit and west pit are currently in the feasibility study stage.
Century Iron Mines
Century Iron Mines (TSXV:FER) is also focused on the Labrador Trough, with interests in various exploration properties in the prolific region. The company has approximately 8.4 billion tonnes of measured and indicated resources and about 11 billion tonnes of inferred resources.
The company also has two key strategic partners, Chinese state-owned enterprises WISCO and Minmetals, which provide Century with financial resource and technical expertise.
Last week, the company filed its condensed consolidated interim financial statement for Q2 and reported substantial corporate working capital of $38.2 million. The capital is comprised of $26.9 million in cash and bank deposits and $11.3 million in net receivables that are not tied to any iron ore project development.
Northern Iron (TSXV:NFE) is a junior exploration company is focused on developing its projects in the Red Lake mining division in Northwest Ontario. Throughout 2015, the company has been working to develop its Griffith property, which is approximately 1,776 hectares in size and consists of 24 unpatented contiguous mining claims.
In July, the company announced the completion of ground magnetic surveys at the property. They were able to outline the main iron ore formation that was previously partially extracted, and also revealed the main north-northeast to northeast trend.
Despite the low iron ore price, Iberian Minerals (TSXV:IML) has continued to advance its Cehegin project in Spain. The company regained a 100-percent interest in Cehegin Iron Ore Holdings in September, and with it full ownership of the project. More recently, Iberian announced that it has entered into an amalgamation agreement with Mineworx Technologies and will be acquiring all of its outstanding shares by way of a three-cornered amalgamation.
Tawana (ASX:TAW,JSE:TAW) is focused on its Mofe Creek iron ore project, located in one of Liberia’s historic iron ore mining districts. In October, the company announced that the Liberian Environmental Protection Agency has granted approval for the scoping study and terms of reference for an environmental and social impact assessment for the project. The approval is a major milestone for the company, as it represents the culmination of over a year’s technical and geological field work.
Iron Road (ASX:IRD) is an ASX-listed company with two iron ore projects in South Australia: the Central Eyre project, which is a a collection of three iron occurrences, and the Gawler project. In early November, the company announced that it has submitted a mining lease application, a mining lease proposal and an environmental impact statement for its Central Eyre iron project.
Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article.