Oceanic Iron Ore Corp. (TSX VENTURE: FEO)(OTCQX: FEOVF) (the
"Company") is pleased to provide an update on the Company's 2011
drill program and fast track PEA process and to report the
Company's March 31, 2011 year end results.
Progress to Date
2011 Drill Program
When the Company's new senior management were appointed in
January 2011, the board and the management team made a conscious
decision to focus significant resources on fast-tracking the
Company's development of the Ungava Bay iron properties, and in
particular focus the initial efforts on the Hopes Advance project
area, which is the area that had been most advanced historically
(with historical scoping study and project design complete).
The 2011 drill program commenced in earnest in April 2011 and is
targeted to delineate approximately 1 billion tonnes at a grade
between 30% and 35% (Sol Fe) by the end of the fourth quarter of
2011. In setting this target, the Company has taken account of the
historic resource, exploration work and metallurgical work
completed on the project areas. The potential quantity and grade is
conceptual in nature as to date there has been insufficient
exploration to define a mineral resource to current 43-101
standards and it is uncertain if the current drill program will
delineate the target as a mineral resource.
Three drills are now operational and focused on various targets
in the Hopes Advance area. Holes are being targeted based on
historical information, although management has also identified
certain extension targets to be tested as part of the overall
program. The drill program is expected to last until the end of the
third quarter of 2011. To date, the Company has drilled
approximately 68 holes over 7,220 metres. Once the program of
twinning and exploration holes in Hopes Advance is substantially
complete, focus will begin to shift to specific targets in the
Roberts Lake and Morgan Lake areas.
Assay Results
On July 5th and 20th 2011, the Company released initial results
from the first six twinned holes of its 2011 drill program. Results
compare closely to those reported historically, in addition to
indicating low levels of sulphur and phosphorous. Results of these
assays and the corresponding historic results are set out in the
tables below:
Table 1: Hopes Advance - Assay Results to date
------------------------------------- ------------------------------------
Corresponding Historic Drill Hole
2011 Results Results (1954 - 1957)
------------------------------------- ------------------------------------
From To T.Width % Fe From To T.Width % Fe
DDH (m) (m) (m) total DDH (m) (m) (m) soluble
------------------------------------- ------------------------------------
HA-11-03 36.85 96.7 58.94 34.0% P34 36.58 96.32 58.83 35.4%
------------------------------------- ------------------------------------
HA-11-04 10.67 83.76 63.13 32.3% P49 10.67 83.76 65.98 34.9%
------------------------------------- ------------------------------------
HA-11-05 21.65 79.55 57.02 34.6% P35 19.81 79.85 59.14 34.9%
------------------------------------- ------------------------------------
HA-11-06 28.30 71.00 44.02 31.3% P28 27.43 82.30 54.04 30.8%
------------------------------------- ------------------------------------
HA-11-07 0.20 64.40 63.22 32.6% P27 7.92 59.83 59.14 34.5%
------------------------------------- ------------------------------------
HA-11-08 11.70 75.10 62.44 32.6% P47 10.67 74.68 63.03 33.4%
------------------------------------- ------------------------------------
In addition, the Company released initial results from the first
two exploration holes. These results confirm potential extension of
mineralization to the east, and a potential thickening of the zone
outside the historic area.
The results of the assays will be used to select intervals with
similar mineralogic and chemical characteristics for compositing.
The composite samples will be analyzed to determine the combined
weight recovery of magnetite and hematite and the resulting
concentrate grade. The drilling is of NQ caliber with sample
lengths being collected up to a maximum length of two meters. Assay
samples collected are sent to ALS Chemex for Whole Rock analysis by
lithium borate fusion and XRF (oxides), Ferrous iron by H2SO4 - HF
and acid digestion and titrimetric finish, and Total Sulphur by
LECO method.
Additional assay results are expected through the summer and
updates will be made as appropriate.
Metallurgical Testing
On June 16, 2011, the Company announced that it had shipped a
ten tonne bulk sample to FLSmidth of Utah for analysis of general
metallurgical and mineralogical characterization and to establish a
conceptual flowsheet. In addition, on July 26, 2011, the Company
announced the appointment of SGS in Lakefield to conduct bench
scale metallurgical testing, including head assays, Wilfley table
gravity testing and Davis tube testing on some 800 samples from the
Company's Hopes Advance Bay project. This testing will provide an
analysis of weight recoveries and concentrate grades which will be
included in the 43-101 resource estimate and Preliminary Economic
Assessment. The Company is deliberately undertaking metallurgical
analysis in excess of that which is typical for a PEA as the
Company believes that the metallurgical characteristics of the iron
and the quality of the product will be a key differentiating factor
compared to others in the sector.
Fast-Tracking of Resource Estimate and PEA
The Company is targeting the release of an interim CIM compliant
43-101 mineral resource estimate as well as Preliminary Economic
Assessment in respect of the Hopes Advance project in October 2011.
As previously announced, the Company has appointed Micon
International to lead the studies. Micon is working alongside AMEC,
which is producing a marine facility study with the help of FedNav,
FLSmidth, who as noted above, are analyzing the Company's bulk
sample and establishing a conceptual flowsheet, SGS who are
conducting bench scale metallurgical testing and Golder, who are
producing a report to be incorporated into the PEA that will focus
on the environmental and social components important to the
project.
Interaction with Stakeholders
The Company has made the establishment of positive social and
community relations a corporate philosophy and priority. The
Company engaged at a very early stage with the local Inuit
communities and has ensured that communication lines remain open
and strong. In particular, the Company has met with and maintains
dialogue with representatives of the Makivik Corporation, the
Landholdings Group, the Nunavik Mineral Exploration Fund, as well
as local leaders.
On May 31, 2011, the Company announced that it had engaged
SECOR, an international strategic consulting firm to produce a high
level economic impact study to be used as the basis for its
continuing discussions with the Quebec government in relation to
the potential economic benefits of the development of the Ungava
Bay Project under the Plan Nord. This initial study lays the
foundation for further analysis as the projects develop, focusing
on job creation, fiscal revenues, infrastructure development and
potential economic and structural benefits for the local
communities in the region. The Company has used this study as a
basis for engaging with both the Federal and Provincial governments
in respect of the development of the projects.
Capital Markets Site Visit
The Company hosted a total of 9 institutional analysts and
shareholders at the Company's inaugural site visit, which took
place on July 6 and 7th, 2011. Participants had the opportunity to
tour the Company's Hopes Advance project and view first-hand the
progress the Company has made in its 2011 drill program, as well as
get a sense of the potential of the project.
Steven Dean, Chairman and CEO of Oceanic noted: "In a very short
period of time, we have managed to catch up to and will soon
surpass the development timeline of many of our peers in the
industry thanks to the hard work and dedication of our management
and operational team, as well as having the advantage of rigorous
historical data and early studies. We are targeting the release of
our PEA in October and given the progress we have made to date, are
confident that we will be in a position to follow this up with the
release of a pre-feasibility study in Q2 2012."
Year - end March 31, 2011 Results
The Company announced today its financial results for the fourth
quarter and year ended March 31, 2011.
The following discussion of the Company's financial performance
is based on the audited Financial Statements and Management's
Discussion and Analysis ("MD&A") for the year ended March 31,
2011, which have been filed on the SEDAR website at
www.sedar.com.
Results for the Fourth Quarter ended March 31, 2011
For the three months ended March 31, 2011, the Company recorded
a net loss of $2,969,334 or ($0.02) per share, compared with a net
loss of $91,190, or ($0.01) per share, for the same period of
2010.
As was the case with the year ended March 31, 2010, operating
expenses for the three months ended March 31, 2011, when compared
to those for the same period of 2010 have increased significantly
due to the overall increase in business activity.
The largest component of the loss in the quarter is represented
by a non-cash expense for stock-based compensation of $2,803,521
(2010 - Nil). This amount comprises approximately 88% of the total
administrative expenses. This amount also substantially contributes
to the entire increase in net loss compared to the three months
ended March 31, 2010. The third quarter of 2011 was the first
period in which stock based compensation was recorded and as such,
contributed to the sharp increase in net loss for the Company.
Furthermore, the Company recorded an income tax recovery of
$145,140 to reflect the tax benefit for losses incurred since the
acquisition of the Property.
Other expense items such as Consulting and Management (2011 -
$174,355, 2010 - $6,000), Professional Fees (2011 - $55,777, 2010 -
$23,577), and Travel (2011 - $28,531, 2010 - Nil) all significantly
increased from the same period of 2010. The items that offset the
expenses above include interest income of $52,150 (2010 - ($7,101))
from the Company's investment of excess cash in fixed rate term
deposits, and unrealized gain on marketable securities of $29,998
(2010 - ($15,543).
Results for the Year ended March 31, 2011
The Company incurred a net loss of $5,215,728 during the year
ended March 31, 2011 (2010: $253,738). The most significant
expenses incurred were stock-based compensation of $4,668,087
(2010: nil), professional fees of $140,893 (2010: $47,425) and
consulting and management fees of $284,194 (2010: $24,000). The
stock-based compensation represents the Black-Scholes calculated
fair value of the stock options issued to directors, officers and
charities during the 3rd and 4th quarters. The increase in both
professional fees and consulting and management fees were a result
of expenditures incurred pursuant to the acquisition of the
properties.
During the year ended March 31, 2011, the Company recorded
interest income of $59,159 (2010: $399), which consisted of
interest earned on the Company's term deposits. The Company
recorded an unrealized gain on marketable securities of $121,250
(2010: $11,000) in relation to the Company's investment in
Yellowhead Mining Inc. and a loss on write-off of investments of
$50,056 (2010: nil) in respect of the Company's investment in a
private company.
Total assets increased to $42,459,994 at March 31, 2011 from
$344,760 at March 31, 2010. The most significant assets at March
31, 2011 were mineral properties of $22,252,259 (March 31, 2010:
nil) and cash and cash equivalents of $19,082,521 (March 31, 2010:
$194,169).
The increase in mineral properties during the period was a
result of the acquisition of the properties. The increase in cash
and cash equivalents during the period was the result of net
private placement proceeds of $21,645,438, proceeds on exercise of
warrants and options of $1,608,782 and proceeds on the sale of
marketable securities of $25,726, partially offset by $2,011,600
paid to the Kataria group, $807,427 spent on the acquisition of
claims and subsequent exploration expenditures, and $1,572,567 used
in operating activities.
Significant transactions
The most significant activities in the year, which are fully
described in the MD&A were:
a. The acquisition of a 100% interest in approximately 3,000 mining claims
located near Ungava Bay, Quebec (subject to a 2% Net Smelter Returns
Royalty);
b. The completion of 3 private placements, which resulted in 81,525,00
shares being issued for gross proceeds of $22,972,500;
c. The appointment of Steven Dean as Chairman and CEO, Irfan Shariff as CFO
and Corporate Secretary, and Eddy Canova as Exploration Manager;
d. The commencement of the Company's 2011 drill program in March, 2011; and
e. The hiring of Micon and other technical consultants to help advance the
2011 exploration program and prepare technical studies on the projects.
Subsequent Events
Subsequent to year end,
a. The Company issued a total of 1,600,000 stock options to officers and
employees of the Company with an exercise price ranging from $0.44 to
$0.62 and expiry dates ranging from April 5, 2020 to May 18, 2021.
b. A total of 527,014 options were exercised, with exercise prices ranging
from $0.24 to $0.27.
c. A total of 850,000 options with an exercise price of $0.40 were
forfeited as a result of the resignation of a director of the Company.
d. A total of 885,000 warrants were exercised at a price of $0.10.
e. The Company sold 125,000 shares of an unrelated company for proceeds of
$171,962.
Eddy Canova, P.Geo., the Exploration Manager for the Company and
a Qualified Person as defined by NI 43-101, has reviewed and is
responsible for the technical information contained in this news
release.
OCEANIC IRON ORE CORP. (www.oceanicironore.com)
On behalf of the Board of Directors
Steven Dean, Chairman and Chief Executive Officer
This news release includes certain "Forward-Looking Statements"
as that term is used in applicable securities law. All statements
included herein, other than statements of historical fact,
including, without limitation, statements regarding potential
mineralization and resources, exploration results, and future plans
and objectives of Oceanic Iron Ore Corp. ("Oceanic", or the
"Company"), are forward-looking statements that involve various
risks and uncertainties. In certain cases, forward-looking
statements can be identified by the use of words such as "plans",
"expects" or "does not expect", "scheduled", "believes", or
variations of such words and phrases or statements that certain
actions, events or results "potentially", "may", "could", "would",
"might" or "will" be taken, occur or be achieved. There can be no
assurance that such statements will prove to be accurate, and
actual results could differ materially from those expressed or
implied by such statements. Forward-looking statements are based on
certain assumptions that management believes are reasonable at the
time they are made. In making the forward-looking statements in
this presentation, the Company has applied several material
assumptions, including, but not limited to, the assumption that:
(1) there being no significant disruptions affecting operations,
whether due to labour/supply disruptions, damage to equipment or
otherwise; (2) permitting, development, expansion and power supply
proceeding on a basis consistent with the Company's current
expectations;
(3) certain price assumptions for iron ore; (4) prices for
availability of natural gas, fuel oil, electricity, parts and
equipment and other key supplies remaining consistent with current
levels; (5) the accuracy of current mineral resource estimates on
the Company's property; and (6) labour and material costs
increasing on a basis consistent with the Company's current
expectations. Important factors that could cause actual results to
differ materially from the Company's expectations are disclosed
under the heading "Risk Factors" in the Company's Filing Statement
dated November 22, 2010 (a copy of which is publicly available on
SEDAR at www.sedar.com under the Company's profile) and elsewhere
in documents filed from time to time, including MD&A, with the
TSX Venture Exchange and other regulatory authorities. Such factors
include, among others, risks related to the ability of the Company
to obtain necessary financing and adequate insurance; the economy
generally; fluctuations in the currency markets; fluctuations in
the spot and forward price of iron ore or certain other commodities
(e.g., diesel fuel and electricity); changes in interest rates;
disruption to the credit markets and delays in obtaining financing;
the possibility of cost overruns or unanticipated expenses;
employee relations. Accordingly, readers are advised not to place
undue reliance on Forward-Looking Statements. Except as required
under applicable securities legislation, the Company undertakes no
obligation to publicly update or revise Forward-Looking Statements,
whether as a result of new information, future events or
otherwise.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Oceanic Iron Ore Corp. Steven Dean Chairman and Chief
Executive Officer +1 604 566 9080 604 566 9081 (FAX)
www.oceanicironore.com
Oceanic Iron Ore (PK) (USOTC:FEOVF)
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