Abaxx Technologies Inc N.ABXX

RE: Jennings 2012 Top Pick

[GreatLakes1]

SECTOR: METALS AND MINING

NEW MILLENIUM IRONCORP. 2,3 (TSX-NML)

New Millenium Iron Corp. (TSX-NML) Recommendation: SPECULATIVE BUY Peter Campbell

Previous Close:$1.31 12-Month Target: $8.00 [phone]

[e-mail]

Potential Return: 510.7% Production (Mt) EPS (C$/sh) P/EPS CFPS (C$/sh) P/CF

Market Cap (MM) $229 2008A - - - - -

52 Week High $4.96 2009A - - - - -

52 Week Low
.90 2010A - - - - -

2011E - -0.03 nm -0.01 nm

For New Millennium, 2012 is going to be a catalyst-rich year. In 2011, its share price peaked at $4.96 on

March 4, just two days before it signed a Binding Heads of Agreement with Tata Steel for the

development of its 100%-owned, giant taconite deposits, LabMag and KéMag. With this kind of response

to just one major catalyst in 2011, we believe that the response to three major catalysts in 2012 ought to

be even greater.

Catalyst #1:

The Company has executed a significant exploration drill program in 2011, for which we believe the

Company will deliver one, or even two brand new multi-billion tonne resource estimates. For

example, based on recent drill results reported by the Company, we now estimate the potential for a

2.1 billion tonne resource at its Lac Ritchie project. The Company has eight other exploration targets

in the Millennium Iron Range that are equally prospective for deposits similar in size to LabMag, KéMag

and Lac Ritchie. Here is the best part: These new taconite deposits are not subject to the Heads of

Agreement it signed with Tata. Any new taconite deposits remain 100%-owned by New Millennium, which

it may freely vend to Tata or any other interested third party. It could also choose to proceed with

development of any of these projects on its own.

Catalyst #2:

New Millennium is scheduled to become Canada’s newest iron ore producer in late Q3/12 or early

Q4/12, with its DSO operation in Schefferville, Québec. Anecdotally, for companies we cover at

Jennings Capital, we have observed that companies approaching first production typically

experience a re-rating in their shares six to eight months prior. We cite as examples Consolidated

Thompson, Copper Mountain (TSX-CUM, SPECULATIVE BUY $8.00) and Labrador Iron Mines Holdings

(TSX-LIM, BUY $11.00). Assuming New Millennium’s DSO project commences production in October

2012, we would expect to start to see a re-rating in NML’s share price some time between February and

April 2012. New Millennium’s DSO project is a 20:80 joint venture with Tata that will produce 4.2 mtpa of

sinter fines, for which Tata will pay 100% of the capital cost, up to a maximum of $300 million. We

estimate $50.1 million in cash flow to NML’s account in 2013, from the DSO project.

Catalyst #3:

In October 2012, we expect New Millennium to deliver a Definitive Feasibility Study (“DFS”) on its

LabMag and KéMag taconite projects. Delivery of the DFS starts the clock ticking on Tata’s

exclusive right to form a JV on the projects. Under the terms of the Binding Heads of Agreement with

Tata Steel, NML will receive a 20% free-carried interest on the capital expenditure to build the project, up

PETER CAMPBELL, P.ENG

Research Analyst

[e-mail]

+1.416.304.3963

SPENCER LANGLEY

Research Associate

[e-mail]

+1.416.304.3894

6

The information contained in this report was obtained from sources we believe to be reliable. We do not represent that such information is accurate or

complete and it should not be relied on as such. Any opinions expressed herein reflect our judgment at this date and are subject to change. Jennings

Capital Inc. and/or employees from time to time may hold shares, options or warrants on any issue included in this report and may buy or sell such

securities. This report is not to be construed as an offer to sell or solicitation to buy securities. Member – CIPF. Jennings Capital (USA) Inc. is a

member of SIPC.

to a maximum of $4.85 billion. Beyond that, New Millennium may optionally increase its equity in the

project to 36% by contributing 16% of the equity. Assuming a total capex of $4.85 billion and a debt:equity

ratio of 70:30, NML needs only contribute $232.8 million to gain a 36% interest in the taconite project,

which is projected to produce approximately 25 mtpa of iron ore products. As at September 30, 2011,

New Millennium’s balance in cash and investments was $87.8 million. Beginning in Q4/12, the Company

expects initial cash flows to its account from commencement of production at its DSO operation.

We have observed that NML’s share price responds well to significant catalysts and with three significant

catalysts to come in 2012, we believe New Millennium’s share price is poised for rapid growth in 2012.