TMR: What are some of the companies you're keeping an eye on, Mark?

ML: One of the ones we like is Champion Iron Mines Limited (CHM:TSX), which has operations in the Labrador Trough. It's well run. It's also just recently done a deal with Mamba Minerals Ltd. (MAB:ASX), an Australian company. We like this deal and recommend that shareholders agree to it. We think bringing in Michael O'Keeffe and his people, as well as increased access to capital helps to derisk the projects, because now Champion Iron Mines has a major player behind it with a proven track record in Australia's iron ore business. From our vantage point, we think this merger really is a positive situation for Champion and its shareholders.

TMR: Does Mamba bring enough cash to cover the capital expenditures (capex)?

ML: Certainly, Mamba brings enough money to move the projects to the next stage. Ultimately, any company that is going to develop these mines is going to need more cash down the road, but once you have the Australians involved, the chances of getting offtake agreements with Chinese and Indian stakeholders goes up significantly. The problem for some of the Labrador Trough players, frankly, is that they don't have any big strategic partner. We're only following companies that have these partners. So this merger has made Champion a much more viable option...

On a more general note, there are a number of factors that look good for the Labrador Trough, including the fact that the deepening of the Panama Canal will be finished by the end of the year. This will allow larger ships to leave Quebec and then go through the Panama Canal, thus cutting time and costs. The other recent development is the South Korean-Canada free trade agreement, which is actually very positive for Canadian iron ore producers because it eliminates the iron ore tariff. Canadian iron ore companies have a competitive disadvantage vis-à-vis some other producers who already had these trade agreements with the South Koreans.

http://www.theaureport.com/pub/na/mark-lackey-what-happens-to-a-mine-deferred