Last updated on April 24, 2014 at 1:21 EDT

Labrador Iron Mines Announces Strategic Relationship with Tata Steel Minerals Canada

March 12, 2013


TORONTO, March 12, 2013 /CNW/ – Labrador Iron Mines Holdings Limited (“LIM” or the “Company”) (TSX:LIM) announces that it has entered into a
framework arrangement with Tata Steel Minerals Canada (“TSMC”), a
subsidiary of Tata Steel Limited, to establish a strategic relationship
between LIM and TSMC whereby the two companies have agreed to
co-operate with each other in various aspects of their respective iron
ore operations in the Labrador Trough and enter into definitive
agreements to formalize this arrangement in due course.

Both LIM and TSMC operate adjacent DSO iron ore projects in the Province
of Newfoundland and Labrador and in the Province of Quebec, near
Menehik, Labrador and Schefferville Quebec, and both utilize and intend
to utilize the same rail and port infrastructure.

The strategic relationship will include multi-part co-operation
agreements in areas of logistics; property rationalization and various
ancillary mutual support and potential off-take arrangements. As part
of the logistics agreements, the companies shall formalize arrangements
for development of the rebuilt rail line that will pass through LIM’s
Silver Yards facilities from TSMC’s new Timmins Area processing plant
to the TSH main rail line.

The companies also agreed to continue their co-operation on the upgrade
of the TSH rail line that connects Silver Yards/Timmins spur line to
the QNS&L line and on other areas of future logistics operations such
as camp accommodations, the sharing of ore cars, flat bed freight cars
and rail car repair facilities.

The co-operation agreement shall also include respective participation
in developing infrastructure at the Port of Sept-Þles with the
objective of establishing the access and terminal facilities for both
companies to the Port’s new deep sea multi-user dock.

As part of the strategic relationship, LIM and TSMC have agreed to enter
into a transaction for the development of LIM’s Howse deposit and
TSMC’s Timmins 4 deposit. LIM shall sell a 51% interest in its Howse
deposit to TSMC. The Howse deposit, located about 25 kilometres north
of LIM’s James Mine and Silver Yards processing plant, has a historical
resource of 28 million tonnes and is part of LIM’s proposed Stage 3
project, currently expected to be developed about 2020. It is expected
that significant cost savings and synergies can be achieved by
processing Howse ore through TSMC’s adjacent Timmins Area plant.

As part of the proposed multi-part cooperation arrangements as above,
and fulfillment of certain conditions precedent, LIM will receive a
cash injection of $30 million. LIM may also acquire up to 100% interest
in TSMC’s “Timmins 4″ deposit, located about 2 kilometres from Howse,
at a consideration of $3 million payable from sales of Timmins 4 ore at
$2 per tonne. In future, TSMC has an option to infuse up to $25 million
in the Howse project to further increase its interest in the Howse
deposit to 70%.

This is a transformational arrangement for LIM that has the potential to
provide significant cost synergies, position LIM to address key
logistics and infrastructure issues and expedite the development of
LIM’s Howse deposit”
said LIM’s Chairman and Chief Executive Officer John Kearney. “The $30 million in cash proceeds from the proposed arrangements will be
used by LIM to fund its working capital, capital expenditure and
exploration requirements for the 2013 operating season”.

About Labrador Iron Mines Holdings Limited (LIM)

Labrador Iron Mines (LIM) is Canada’s newest iron ore producer with a
portfolio of direct shipping (DSO) iron ore operations and projects
located in the prolific Labrador Trough. Initial production commenced
at the James Mine in June 2011, with the sale of 386,000 dry tonnes of
iron ore recorded in the first start-up year. The first full production
season commenced in April 2012 and LIM sold ten shipments totalling
approximately 1.6 million dry tonnes of iron ore during 2012.

The James Mine is connected by a direct rail link to the Port of
Sept-Þles, Québec. The project also benefits from established
infrastructure including the town, airport, hydro power and railway
service. Starting with the James Mine and leading to the development of
the expanding Houston flagship project, LIM’s objective is to provide
shareholders with long-term value with a plan to increase production
towards 5 million tonnes per year from a portfolio of 20 iron ore
deposits in Labrador and Quebec, all within 50 kilometres of the town
of Schefferville.

LIM is currently the only independently-owned Canadian iron ore producer
listed on the Toronto Stock Exchange and trades under the symbol LIM.

Cautionary Statements:

Historical Resources:

The historical resources estimates in this Press Release are based on
work completed and estimates prepared by Iron Ore Company of Canada
(“IOC”) prior to 1983, they are not current and were not prepared in
accordance with National Instrument 43-101 – Standards of Disclosure
for Mineral Projects (“NI 43-101″). The IOC classification reported all
resources (measured, indicated and inferred) within the total mineral
resource. A qualified person has not done sufficient work to classify
the historical estimates as current mineral reserves. These historical
results provide an indication of the potential of the properties and
are relevant to ongoing exploration. However, the historical estimates
should not be relied upon.

Forward Looking Statements:

Some of the statements contained in this Press Release may be
forward-looking statements which involve known and unknown risks and
uncertainties relating to, but not limited to, the Company’s
expectations, intentions, plans and beliefs. Forward-looking
information can often be identified by forward-looking words such as
“anticipate”, “believe”, “expect”, “goal”, “plan”, “intend”,
“estimate”, “may” and “will” or similar words suggesting future
outcomes, or other expectations, beliefs, plans, objectives,
assumptions, intentions or statements about future events or
performance. Forward-looking information may include reserve and
resource estimates, estimates of future production, unit costs, costs
of capital projects and timing of commencement of operations, and is
based on current expectations that involve a number of business risks
and uncertainties. Factors that could cause actual results to differ
materially from any forward-looking statement include, but are not
limited to, failure to establish estimated resources and reserves, the
grade and recovery of ore which is mined varying from estimates,
capital and operating costs varying significantly from estimates,
delays in obtaining or failures to obtain required governmental,
environmental or other project approvals, delays in the development of
projects, changes in exchange rates, fluctuations in commodity prices,
inflation and other factors. Forward-looking statements are subject to
risks, uncertainties and other factors that could cause actual results
to differ materially from expected results. There can be no assurance
that the Company will be successful in maintaining any agreement with
any First Nations groups who may assert aboriginal rights or may have a
claim which affects the Company’s properties or may be impacted by the
Schefferville Projects.  Shareholders and prospective investors should
be aware that these statements are subject to known and unknown risks,
uncertainties and other factors that could cause actual results to
differ materially from those suggested by the forward-looking
statements. Shareholders and prospective investors are cautioned not to
place undue reliance on forward-looking information. By its nature,
forward-looking information involves numerous assumptions, inherent
risks and uncertainties, both general and specific, that contribute to
the possibility that the predictions, forecasts, projections and
various future events will not occur. The Company undertakes no
obligation to update publicly or otherwise revise any forward-looking
information whether as a result of new information, future events or
other such factors which affect this information, except as required by

SOURCE Labrador Iron Mines Holdings Limited

Source: PR Newswire