Deal will account for 3/4 of all anticipated production from DSO project. Great news for sure. KeMag project much larger and work ongoing as well.

NML is a long-term keeper for sure. 100 million market cap is peanuts for a resource of this size. Resources likely to be expanded with ongoing exploration program. Production not that far off for DSO. Assuming a positive feasibility study with a few more LOI like this one and KeMag will be a GO for sure.

This months sell-off a trememdous buying opportunity IMO. A very serious spike in SP is very likely over the next 6 months or so.

red911

New Millennium signs LOI for sale of DR-grade pellets

2008-07-31 07:26 ET - News Release

Mr. Robert Martin reports

NEW MILLENNIUM CAPITAL CORP. ANNOUNCES LETTER OF INTENT WITH AL-TUWAIRQI GROUP OF COMPANIES FOR THE SALE OF DR GRADE PELLETS OR LUMP ORES

New Millennium Capital Corp. has signed a letter of intent for the future sale of up to three million tonnes per year (mtpy) of DR (direct reduction) grade pellets or iron-ore lump to Al-Tuwairqi group of companies. Al-Tuwairqi, headquartered in Dammam in Saudi Arabia, has production facilities in the Middle East and United Kingdom. Al-Tuwairqi currently produces 1.5 million tonnes per year of direct reduced iron (DRI) using the Midrex DR process. The DRI is fed to electric furnaces to produce crude steel. Al-Tuwairqi is actively pursuing expansion projects in Saudi Arabia, UAE, Bahrain, Egypt and Pakistan. It plans to achieve crude steel production of 6.0 million tonnes per year by 2011 in Saudi Arabia alone.

As announced (see news issued in Stockwatch) on July 21, 2008 (NR 08-14), NML expects to produce four million tonnes per year of iron-ore products from its DSO project. Subject to completion of a positive feasibility study, regulatory approvals and project financing, the DSO project is expected to start initial production in the third quarter of 2010. NML is also pursuing the development of the KeMag project, which is expected to produce 15 million tonnes per year of blast furnace (BF)- and DR-grade pellets as well as 7.0 million tonnes per year of concentrates. Subject to completion of a positive feasibility study, regulatory approvals and project financing, the KeMag project is expected to start production in 2012. NML's marketing effort is targeting DRI producers in the Middle East because of the high-growth projections for steel production in the area. DR grade is also a value-added product that currently commands a premium price of about 10 per cent more than the price of BF-grade pellets.

Under the letter of intent, Al-Tuwairqi would purchase three four million tonnes per year of DR-grade pellets or lump ores for 10 years commencing in 2012. Based on the current price of $163 (U.S.) per tonne for DR-grade pellets, these purchases would generate in excess of $490-million (U.S.) per year or about $4.9-billion (U.S.) over the life of the contract. The letter of intent is an expression of interest only, and any binding contract of purchase and sale will be subject to a production decision by NML, and future negotiations related to terms and conditions of a definitive agreement, which has to be approved by each company's respective board of directors.

"We are extremely pleased to have concluded this letter of intent from a fast-growing and dynamic steel producer. The security of raw material supply is the foremost strategic need for any steel producer. NML's DR-grade pellets were tested by the Midrex Corp. and performed well in standard Midrex tests. Al-Tuwairqi has also carried out satisfactory test work with NML's DR-grade pellets in its own furnace. We believe that the resources of the Millennium iron range will assist in supporting Al-Tuwairqi's ambitious growth plan for many years to come," stated Robert Martin, president and chief executive officer of NML.

We seek Safe Harbor.