Labrador Iron Mines Announces Strategic Relationship with Tata Steel Minerals
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
TSMCwhereby 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
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-Îles 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 $25million 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-Îles,
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
LIM is currently the only independently-owned Canadian iron ore producer
listed on the Toronto Stock Exchange and trades under the symbol LIM.
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 law.
please visit LIM's website atwww.labradorironmines.ca or contact:
John F. Kearney Chairman and Chief Executive Officer Tel: (647) 728-4105
Rodney Cooper President and Chief Operating Officer Tel: (647) 729-1287
Keren Yun Vice President, Investor Relations and Communications Tel: (647)
SOURCE: Labrador Iron Mines Holdings Limited
To view this news release in HTML formatting, please use the following URL:
CO: Labrador Iron Mines Holdings Limited
-0- Mar/12/2013 11:00 GMT
Press spacebar to pause and continue. Press esc to stop.