Barry FitzgeraldCanada calling the juniors by:Barry...

Barry Fitzgerald

Canada calling the juniors

by:Barry Fitzgerald
From:The Australian
February 12, 201312:00AM

ALL the iron ore in the world amounts to nothing without access to rail and ports to get the steelmaking raw material to market. It is a harsh truth that the once high-flying Pilbara iron ore juniors know all too well`.

MAMBA MINERALS (MAB)

Despite the strong rally in iron ore prices since last September's low, the market values of the iron ore hopefuls have been left to flounder.

No production, and no near-term prospect of production because of infrastructure shortcomings, and the capital drought for new projects means they are likely to continue to flounder.

And just to rub salt into their wounds, the Pilbara iron ore king Rio Tinto wasted no time yesterday crowing that the Australian Competition Tribunal had decided that its Hamersley and Robe iron ore railway lines in the Pilbara did not have to be opened up to others, cementing the log jam for the juniors between their Pilbara iron deposits and the seaborne market in the stuff.

It is for all those reasons that a bunch of juniors reckon Africa is the go. Good luck to them.

Others reckon South America holds more promise for an aspirational iron ore producer than does the Pilbara. And those involved over there have been kicking some goals.

Then there is a newer set that reckons a first-world destination like Canada is the go.

Throw in the presence of an established industry with open access regimes covering rail and multi-user ports, and the availability of cheap hydro-electric power, and it is a wonder that there has not been a flood of Aussie iron ore juniors prepared to swap the heat and red dust of the Pilbara for the freezing cold of Canada, most notably the Labrador Trough iron ore province which straddles northeast Quebec and western Labrador.

Rio has long been there with its Iron Ore Company of Canada operations, the country's biggest. But Rio's grip on the province, or, more to the point, its infrastructure, is nothing like that it shares in the Pilbara with BHP Billiton and Fortescue.

So the province shapes up as a happy hunting ground for Aussie juniors compared with the Pilbara.

As mentioned by a colleague last month, one ASX junior that has already made its way over there is Mamba Minerals (MAB). The update today is that drilling is about due to start at its Snelgrove Lake project, 200km north of Labrador City.

It's early days but the entry of some big swinging mining-type investors on to its share register in recent months suggests there are high hopes being held for Mamba's initial $6.5 million drilling program (under its option deal on the property with Canada's Altius Resources).

The program is all about confirming the seriously big-tonnage magnetite potential of Snelgrove, as well as determining the potential for higher grade (direct shipping) hematite material.

Shares in Mamba have moved higher in recent months in anticipation, though yesterday they were down 3c to 46c each.

http://www.theaustralian.com.au/business/opinion/canada-calling-the-juniors/story-fnciil7d-1226575711718