Feb. 3, 2011

Cliffs Chromite Project involves the largest known North American chromite deposit, located in one of the most remote areas of Ontario, the Far North. Exploration to date has consisted of geophysics and diamond drilling to delineate the Black Thor chromite zone. The current inferred mineral resource estimate indicates the Black Thor deposit contains approximately 69.5 million tonnes at a grade of about 31.9% Cr2O3.

The project information released today presents a ‘base case,’ which reflects one set of realistic options for the major inter-related components of the project – from mining of the chromite ore to ferrochrome production. These ‘base case’ project components do not necessarily represent the final design, location or scope of the project. During the course of prefeasibility, feasibility and detailed design studies, other viable options may be identified and considered.

“Cliffs is currently conducting pre-feasibility studies to more accurately determine the viability of this project,” stated Bill Boor, President, Ferroalloys. “Our work has progressed to a point that enables more detailed and meaningful stakeholder discussions that will impact our decisions about the project.”

The ‘base case’ includes the following major inter-related components:

• An open pit chromite mine with associated housing and other proposed infrastructure located at the site. The mine may transition to underground mining in 10 to 15 years after mining begins. Further testing and mine planning is required to determine the timing of a transition to underground mining.
• An ore processing facility to produceconcentrate and associated load-out facility located at the mine site.
• An integrated transportation system to link all project components. This transportation system will include a permanent all-season road to allow the movement of people, equipment, supplies, lump ore and concentrate to and from the proposed mine site and the existing Ontario rail infrastructure. The evaluation to date has included a comparison of road and rail options within several transportation corridors. The northern extension of Road 643 from Nakina has been identified as a realistic and viable option. Accordingly, an all-weather road in this corridor was included in the ‘base case.’
• A ferrochrome production facility (FPF) utilizing closed electric arc furnaces to manufacture ferrochrome. The availability of a large, reliable, long-term and cost-competitive supply of electricity is a requirement for the FPF. Current estimates of the furnace requirements are approximately 300 MW. The Company has identified only a few places in Northern Ontario where this power requirement can be met. A brownfield site within the City of Greater Sudbury was identified as the ‘base case’ location for the FPF. Cliffs has plans to continue to meet with other northern municipalities, including Thunder Bay, Greenstone and Timmins, to continue discussing the potential of locating the FPF in their community.

“At current provincial power rates, there isn’t a location in Ontario that is economically viable for Cliffs to build the FPF. Despite this, we have named Sudbury as the ‘base case’ location, which we believe is representative of a technically feasible site,” said Boor. “The viability of an Ontario-based FPF and final selection of the location are still being evaluated.”

The pre-feasibility study for this chromite project is expected to be completed by September 2011. If the pre-feasibility report is favorable, a full feasibility study would begin immediately afterward and is expected to be completed in late 2012.

“Assuming prefeasibility and feasibility studies are favorable, we expect to begin production in 2015,” Boor noted. “In order to achieve this target, we will continue our discussions with First Nations, interested individuals and all levels of government. We continue to be very excited about the potential to develop this project for the mutual benefit of Ontario, the First Nations communities and Cliffs.”