Labrador Iron Mines reports March 2013 year-end results and provides
Notice: Conference Call and Webcast held today at 11:00 am ET. Dial-in: +1
(647) 427-7450 or +1 (888) 231-8191
TORONTO, July 3, 2013 /CNW/ - Labrador Iron Mines Holdings Limited ("LIM" or
the "Company") (TSX: LIM) today reports its operating and audited financial
results for the fiscal year ended March 31, 2013.
LIM is also pleased to provide an update on its 2013 operating season, as the
second shipment of iron ore departed the Port of Sept-Îles on June 27, 2013.
Recent Operating Highlights
LIM commenced its third season of operations in April 2013 with the re-start
of full-scale mining activities. The Company is targeting 1.75 million to 2.0
million tonnes of saleable iron ore production in 2013. Recent operating
-- The first shipment for 2013 sailed from the Port of Sept-Îles
in early June carrying approximately 174,000 wet metric tonnes
("wmt") of iron ore. This was followed by LIM's second shipment
carrying approximately 177,500 wmt on June 27, 2013.
-- The Silver Yards Phase 3 upgrade and expansion for the wet
plant was commissioned in June and has been operating in
conjunction with the dry plant, which has been processing ore
-- Railway operations recommenced in early April. For the 2013
operating season, LIM is using newly-built, rotary dumper
compatible iron ore gondolas, comprising longer, 164-car train
sets, allowing for improved productivity and potential cost
-- New, independent National Instrument 43-101 ("NI 43-101")
year-end resource estimates showed a 33% net increase in LIM's
year-end mineral resource to 59.5 million tonnes grading 56.7%
Fe, including an increase in the combined Houston and Malcolm
resource to 40.6 million tonnes grading 57.6% Fe. In addition,
a new indicated and inferred resource was also estimated on
historic stockpiles, providing supplementary plant feed for
Silver Yards in future years.
-- LIM announced its first independent NI 43-101 inferred mineral
resource estimate on the Elizabeth Taconite Project of 640
million tonnes grading 31.8% Fe.
"We are pleased with the solid start to our third operating season,
highlighted by two shipments sold in June," commented Rod Cooper, President
and Chief Operating Officer. "Our operating crews have worked hard in
addressing the challenging weather conditions experienced in April and May and
activities at site have progressed well as we head into the important summer
months. The ramp up of the Silver Yards processing facility and connection to
the power grid are two positive accomplishments, and with a number of other
enhancements made in the areas of the mine, process plants and rail, we look
forward to meeting our production targets for the year."
Addressing Important Requirements for the 2013 Operating Season
"In preparation for the 2013 operating season, we have executed many important
initiatives in securing our working capital requirements, increasing liquidity
and addressing volatility in the iron ore markets." commented JohnKearney,
Chairman and Chief Executive Officer. "We believe this has allowed us to
mitigate some of the challenges we experienced in 2012, which overshadowed our
operational achievements during the year.
-- In May 2013, LIM signed a new, two-year iron ore sales
agreement with the Iron Ore Company of Canada ("IOC") for the
sale of LIM's iron ore production for calendar years 2013 and
2014, with the price calculation based on the monthly average
of the market index.
-- At the same time in May 2013, LIM entered into an off-take
financing arrangement with RB Metalloyd Limited ("RBM"), under
which RBM advanced a pre-payment of US$35 million to LIM, to be
credited against the proceeds of LIM's committed sales of
3,500,000 tonnes of iron ore during 2013 and 2014.
-- LIM has put in place a limited price protection program to
address potential iron ore market volatility, purchasing put
options on 825,000 tonnes of iron ore over the period August to
October 2013, exercisable at a CFR China price of US$105 per
-- In order to mitigate the risk of significant ocean freight cost
escalation, LIM has agreed to fixed freight costs to northern
China on seven vessels during 2013.
-- In March 2013, LIM established a strategic relationship with
Tata Steel Minerals Canada ("TSMC"), a subsidiary of Tata Steel
Limited, which includes multi-part cooperation agreements in
various aspects of the companies' respective iron ore
operations in the Labrador Trough. Subject to completion of
formal agreements, TSMC will pay $30.0 million to LIM for the
sale of a 51% interest in LIM's Howse deposit, which will be
used to fund various expenditures for the 2013 operating
John Kearney added, "For 2013, our operational priorities are to minimize
costs, maximize production and sales and to ensure that sales revenue is
generated as early as possible. We have implemented cost reduction and cash
conservation measures across all aspects of our operations."
Update on 2013 Operating Season
James Mine and Silver Yards
In line with the Company's seasonal mine plan, LIM commenced full-scale
operations at the James Mine in April 2013. A waste stripping program was
carried out in March and a total of approximately 88,000 tonnes of waste was
removed from the James pit.
The Silver Yards processing facility restarted for the 2013 season in April,
as the dry screen commenced processing ore from the James Mine. A new dry
screening unit was delivered to site during the fall of 2012, which has been
installed for use during the 2013 operating season.
Construction of the Phase 3 expansion of the Silver Yards wet plant was
completed and commissioned in June and is now operating in conjunction with
the dry plant. Phase 3 has been designed to increase the wet plant's
production capacity and to recover ultra-fine material. A new, experienced
plant operations contractor has been selected to operate the wet plant in 2013.
LIM has now substantially completed the establishment of grid power at Silver
Yards, with final completion expected to be achieved in July 2013. Upon
completion, the power supply for the Silver Yards processing facility and
LIM's Bean Lake mine camp will be substantially converted from diesel fuel to
electric power during the operating season.
Rail Operations and Iron Ore Sales
Rail operations re-commenced in April, starting with one, longer train set
comprising 164 cars, with two additional train sets of 164cars added in May
and at the end of June, respectively. For the 2013 operating season, LIM is
using newly-built, rotary dumper compatible iron ore gondolas, allowing for
improved productivity and potential cost savings. The iron ore gondolas are
leased from TSMC as part of LIM's cooperation with TSMC on various rail
logistics. It is planned that a fourth train set may possibly be introduced
later in the operating season.
LIM's first shipment for 2013 sailed from the Port of Sept-Îles in early
June, carrying approximately 174,000 wmt of iron ore at a planned averaged
grade of about 58% Fe. On June 27, 2013, LIM's second shipment of
approximately 177,500 wmt, comprising 77,500 wmt of about 58% Fe and 100,000
wmt of about 62% Fe, departed from the Port.
Subsequent shipments during 2013, expected at a rate of two shipments per
month from July to November, will consist of sinter fines and lump ore at a
planned average grade of 62% Fe.
Under the new, two-year iron ore sales agreement signed with IOC in May 2013,
IOC will pay for the iron ore progressively, as the ore is resold, with the
price calculation based on the monthly average of the market index, which
should decrease LIM's exposure to market volatility experienced in the past
two years. IOC payments will be later reconciled based on IOC's net actual
aggregate resale price, adjusted for any product quality specification
premiums or penalties, after ocean freight and IOC's price participation.
LIM also entered into a financing agreement with RBM in May 2013, pursuant to
which RBM advanced a pre-payment of US$35 million to LIM, which will repaid
over a period of two years, credited against the proceeds of LIM's committed
sales of 3,500,000 tonnes of iron ore shipments between July 2013 and December
RBM has entered into an iron ore off-take agreement with IOC under which RBM
has agreed to buy the LIM iron ore from IOC on an FOB Sept-Îles basis.
The advance payment financing of US$35 million from RBM provides LIM with
important working capital. In addition, RBM brings LIM experience and
expertise in the marketing and sale of iron ore as well as extensive knowledge
of the iron ore and steel markets worldwide.
In order to protect against volatility in the iron ore market, LIM has put in
place a limited price protection program with a major international bank to
protect against a drop in the price of iron ore below US$105 per tonne down to
US$90 per tonne during the months of August through October 2013. LIM has
purchased put options on a total of 825,000 tonnes of iron ore over the period
August to October 2013, exercisable at a CFR China price of US$105 per tonne.
LIM has also sold matching put options exercisable at US$90 per tonne on the
same number of tonnes over the same period.
In addition, in order to mitigate the risk of significant ocean freight cost
escalation, LIM has agreed to fixed freight costs to northern China on seven
vessels during 2013, through a contract of affreightment ("COA") with RBM.
LIM is currently targeting 1.75 million to 2million tonnes of saleable iron
ore production in 2013. Cash operating costs in 2013, consisting of mining,
processing, rail and transportation and general and administrative costs,
unloaded at the Port, are expected to be in the range of $65 to $70 per tonne
of product sold.
Strategic Relationship Established with Tata Steel Minerals Canada
In March 2013, LIM entered into a framework arrangement with TSMC, which
includes multi-part cooperation agreements in areas of logistics, property
rationalization and various ancillary mutual support and potential off-take
arrangements. As part of the strategic relationship, LIM and TSMC have agreed
to enter into a transaction for the joint development of the Howse deposit,
whereby LIM will sell a 51% interest in Howse to TSMC. In the future, TSMC may
increase its interest to 70%. It is anticipated that the agreement with TSMC
will expedite the development of the Howse deposit and it is expected that
significant cost savings and synergies can be achieved by processing Howse ore
through TSMC's adjacent Timmins Area plant.
March 2013 Year-End Review
For the fiscal year ended March 31, 2013, LIM recognized revenue from mining
operations of $95.7 million (FOB Port of Sept-Îles) on sales of 1.56 million
dry tonnes of iron ore in ten shipments completed during the year. This
revenue is recognized on an FOB Port of Sept-Îles basis and is net of
deduction of ocean freight and IOC's participation.
Revenue for the 2013 fiscal year was negatively impacted by low realized iron
ore prices (CFR China spot price less value-in-use adjustments and before
ocean freight and IOC participation), particularly in the period from August
to October 2012, when the spot price of iron ore suffered a sharp decline of
For the fiscal year ended March 31, 2013, LIM reported a loss of $129.7
million or $1.56 per share, resulting primarily from an operating loss (before
depletion and depreciation) of $28.9million, a depletion and depreciation
charge of $29.7million and write-downs totalling $61.2 million comprising a
write-down of mineral property interests of $58.1million and a $3.1 million
provision against certain doubtful receivables.
The depletion and depreciation charge of $29.7 million represents a period
charge, primarily on a units-of-production basis, of the cost of the James
Mine (including capitalized stripping and dewatering), Silver Yards processing
plant, transportation equipment, and infrastructure and site properties
associated with the operational activities of the James Mine.
At March 31, 2013, in accordance with its accounting policies, the Company
completed an assessment of the carrying amount of its mineral property
interests based on a combination of factors including net present value
estimates and arms-length transaction value methodologies. Having regard
particularly to the reduction in the resources in the James Mine, as at March
31, 2013, as a result of depletion during 2012 and adjustments following a
reconciliation of the dry bulk density calculations to account for greater
porosity than originally anticipated, which resulted in a shorter than
anticipated mine-life, the carrying amount of the Stage 1 mineral property
interests relating primarily to the James Mine, which included an amount of
$22.5 million relating to previously capitalized stripping and dewatering
costs prior to the commencement of commercial production, were written down by
an aggregate non-cash amount of $58.1 million. At March 31, 2013, the carrying
amount of LIM's mineral property interests was $105.9 million and the net book
value of property, plant and equipment was $108.9 million. The net present
value estimates were made using a number of assumptions including a long-term
iron ore price of US$115per tonne (CFR China 62% Fe sinter fine) and a
discount rate of 10%. Net present value estimates are highly sensitive to
changes in the inherent inputs and assumptions.
During fiscal 2013, LIM invested approximately $39.9 million in property,
plant and equipment, consisting mainly of investments in Phase 3 of the Silver
Yards wet plant, grid connection infrastructure and expansion of LIM's mine
Also during fiscal 2013, LIM advanced a total of $5 million to the TSH railway
as non-repayable contributions to the TSH railway's capital upgrade program,
and also advanced $0.75 million to TSH railway as a refundable capacity
reservation deposit. LIM also advanced $5 million to the QNS&L railway as an
installment towards its advance payments required to secure locomotive and
infrastructure capacity to meet the anticipated long-term haulage volumes on
the QNS&L railway. A preliminary installment of $6.4 million was also paid to
the Port of Sept-Îles to secure ship loading capacity of 5 million tonnes per
year in a new multi-user deep water dock in the Port of Sept-Îles dedicated
exclusively to iron ore shipments. LIM also guaranteed a final buy-in payment
installment of an additional $6.4 million payable in July 2013.
As at March 31, 2013, LIM had current assets of $41.2 million, including
inventories with a carrying value of $11.0million and accounts receivable
and prepaid expenses of $12.6 million. Cash and cash equivalents totalled
$16.2million at March 31, 2013, with an additional $7.7 million in
restricted cash. The Company's cash and cash equivalents are invested in an
investment grade short-term money market fund and deposits with a major
Current liabilities, consisting of accounts payable and accrued liabilities,
the current portion of finance lease obligations and rehabilitation provision,
were in aggregate $28.8 million at March 31, 2013.
Operational Results - Fiscal Year ended March 31, 2013
LIM accomplished many operational achievements in its first full season of
commercial production in 2012 (fiscal 2013), in which the Company demonstrated
its operational ability to mine, process, rail, ship and sell its iron ore.
LIM met its revised production target of 1.7 million wet tonnes and sold 1.56
million dry tonnes of iron ore in 10ships during the year, which represents
a substantial increase in sales over the 2011 operating season. Rail volumes
also increased substantially year-over-year, totalling 1.6 million wet tonnes
delivered to the Port of Sept-Îles.
LIM also completed a very successful exploration season during fiscal 2013,
which included 14,000 metres ("m") of drilling on the Houston, Malcolm and
James Deposits, as well as bulk sampling of historic stockpiles to provide
plant feed to Silver Yards in the coming years. LIM also completed very
promising exploration work on the Elizabeth Taconite Project located near the
currently producing James Mine. LIM's exploration efforts have resulted in new
and updated resource estimates as outlined in the "2013 Resource Updates"
Despite the many operational achievements, the year ended March 31, 2013 was
adversely impacted by the rapid and severe drop in spot iron ore prices, which
occurred in August 2012 and continued through to October, when iron ore spot
prices and transaction volumes suffered a sharp decline. LIM responded
decisively with revised strategies in the mine, process plant and rail
transport to optimize production at the lowest possible cost. Other cost
reductions and deferral of capital expenditures were also carried out to
ensure the 2012 and future operating seasons continue to operate in a
Production and Operating Costs
Operating costs in fiscal 2013, consisting of mining, processing, rail,
transportation and site and camp operating costs, including winter costs and
March 2013 waste stripping activities, totaled approximately $121 million, or
approximately $77.50 per tonne of product sold, unloaded at the Port of
Sept-Îles. Transportation costs include all charges for train loading and
unloading, locomotive and rail car leasing and maintenance costs and tariffs
and for the fiscal year included charges totaling $7 million ($4.50 per tonne
of product sold during the fiscal year), relating to rail and train unloading
take-or-pay volume penalties and a one-off charge related to the Pointe aux
Basque port facility. Royalties during fiscal 2013 and 2012 were equal to
US$1.50 per tonne of product sold.
LIM's operating results for the fiscal year ended March 31, 2013 and 2012, are
outlined in the following table:
| | Fiscal Year Ended | Fiscal Year Ended |
| | March 31, 2013 | March 31, 2012 |
|(all tonnes are dry | Tonnes|Grade (% Fe)| Tonnes|Grade (% Fe)|
|metric tonnes) | | | | |
|Total Ore Mined |1,828,398| 61.3%|1,205,609| 60.7%|
|Waste Mined |3,215,985| --|3,004,355| --|
|Ore Processed and | 954,813| 58.2%| 572,052| 58.4%|
|Screened | | | | |
| Lump Ore Produced| 98,693| 61.2%| 79,407| 63.6%|
| Sinter Fines | 693,173| 61.4%| 152,735| 65.0%|
|Produced | | | | |
|Total Product Railed |1,492,960| 62.3%| 563,569| 64.9%|
|Tonnes Product Sold |1,559,620| 62.5%| 385,898| 64.9%|
|Port Product Inventory | 111,009| 60.9%| 177,669| 64.9%|
|Site Product Inventory | 3,551| 58.4%| 69,983| 65.3%|
|Site Run-of-Mine Ore | 446,975| 56.2%| 195,117| 59.0%|
|inventory | | | | |
2013 Resource Updates
Following on the successful 2012 exploration field program, comprising 14,000
m of diamond and reverse circulation drilling, LIM reported a 33% net increase
in its total measured and indicated mineral resource of 59.5million tonnes
grading 56.7% Fe as at March 31, 2013.
Resources at the Houston 1, 2 and 3 Deposits continued to expand, increasing
to 31.3 million measured and indicated tonnes grading 57.5% Fe, a 37% increase
over the previous year. In addition, LIM identified a new measured and
indicated mineral resource estimate for its Malcolm 1 deposit of 9.2 million
tonnes grading 57.8% Fe, which has more than tripled the previous historical
resource estimate. The Malcolm 1 deposit is located approximately four
kilometres ("km") from Houston and is considered to be the northwest
extension. Together, the Houston and Malcolm deposits are estimated to contain
40.6 million tonnes grading 57.6% Fe and currently comprise LIM's planned
Stage 2 DSO operations.
A mineral resource definition and bulk sampling program on two of seven
historical stockpiles was initiated during the 2012 exploration field program
with a view to providing supplemental plant feed. These previously-mined
stockpiles are located within 15 km of the Silver Yards processing facility
and form part of LIM's Stage 1 deposits. An initial mineral resource was
estimated for the two stockpiles, totalling 3.5million tonnes of indicated
resource grading 49.1% Fe and 2.9 million tonnes of inferred resource grading
LIM's exploration efforts have also identified a large iron orebody located
within the Elizabeth Taconite Project, resulting in its first independent
inferred mineral resource estimate of 620 million tonnes at 31.8% Fe and
exploration potential of 350 million to 500 million tonnes at 31.9% Fe.(1)
The Elizabeth Project is located approximately four km from the James Mine,
alongside existing infrastructure including roads, rail bed and power line
corridor. There is significant potential for resource expansion, as the
deposit remains open along strike to the northwest and southeast (refer to the
press release dated June 24,2013).
NI 43-101 Technical Reports containing LIM's year-end mineral resource
estimates as at March 31, 2013 and LIM's first independent mineral resource
estimate of the Elizabeth Taconite Project as at June 15, 2013 have been filed
on SEDAR, available at www.sedar.com.
(1) The potential tonnage and grade in Elizabeth No. 2 is conceptual in
nature; there has been insufficient exploration to define a mineral resource
and it is uncertain if further exploration will result in the target being
delineated as a mineral resource. The range of tonnage has been outlined based
on the lateral extent of ground and airborne magnetic and gravity anomalies,
surface mapping and two drill holes intercepts, which define the width and
estimated grade at the southeast extent of Elizabeth No. 2. It is uncertain if
further exploration will result in such potential being delineated, in whole
or in part, as a mineral resource. Taconites require further upgrading through
a concentrator involving a major capital investment to produce a saleable iron
Stage 2 Houston Development
The Houston deposits (Stage 2 South Central Zone) are situated in Labrador,
about 15 km southeast of the James Mine and Silver Yards processing facility.
The Malcolm Deposit is located approximately 4 km from Houston and is
considered to be the northwest extension.
In February 2013, LIM filed registration documents with the Government of
Newfoundland and Labrador and with the Federal Canadian Environmental
Assessment Agency ("CEAA") for the second phase of development of the Houston
1 and 2 deposits, which includes the construction of a wet process plant
incorporating crushing, screening, washing and magnetic separation. This plant
will be capable of upgrading lower grade ore (50% to 59% Fe) into saleable
sinter and lump products.
In April 2013, CEAA notified LIM that a Federal Environmental Assessment was
not required and in May, the Newfoundland and Labrador Minister of Environment
and Conservation released this second phase of the Houston Project from the
provincial environmental assessment process, subject to conditions. This
environmental release will allow LIM to complete the applications for permits
and regulatory approvals required for the construction of the wet processing
plant for the Houston Project.
The environmental release of the first phase of the Houston Project, including
the haulage road, was released from further environmental assessment in March
2012. LIM has subsequently received surface and mining leases, and a
construction permit for the haulage road and rail siding and has also selected
a civil contractor for the road and bridge construction. It is expected that
initial mine development at the Houston deposit will include construction of
the haulage road and railway siding, mine infrastructure and related
facilities, with initial production of Houston ore coming from in-pit dry
crushing and screening.
Commencement of construction activities for the Houston Project is subject to
the availability of financing and the receipt of remaining permits.
Development costs for the first phase are estimated to be approximately $37
million on haulage road and rail siding access, with an additional $20 million
of mine development costs, which would enable initial production from Houston
utilizing in-pit dry crushing and screening. This does not include the capital
cost of a new wet processing plant, which will be required in about the third
year of Houston operations.
LIM is evaluating various potential strategic options, off-take arrangements
and/or credit facilities and other financing alternatives to fund the planned
Houston development and related transportation and port infrastructure
When in full production, the Houston Project is expected to produce about 2.5
million tonnes of iron ore annually.
Iron Ore Market Conditions
Robust steel production and iron ore demand from emerging economies and
particularly from China have underpinned the rise in iron ore prices over the
past seven years. In addition, supply constraints, such as falling ore grades
at major mines and increasing capital expenditures to build new capacity, have
resulted in iron ore production consistently falling short of market
Growth in iron ore demand has been dominated by China, whose steel production
and consumption (rate of steel usage per capita) has been steadily increasing
over the past decade. The country's rapidly increasing steel intensity (steel
usage per capita) has been driven by rapid economic growth and continued
urbanization, leading to significant increases in the rate of residential
construction, durable goods production and public infrastructure development.
There has been significant price volatility in iron ore prices over the past
year due to apparent changes in Chinese stock levels and there may be further
short term volatility in the future. Nevertheless the Company is of the view
that the long term iron prices will remain firm due to the following factors:
-- strong steel and iron ore demand growth from China, which will
continue to be supported by Chinese Government stimulus
spending as well as structural factors, such as the
urbanization of China's population;
-- strong demand growth in the medium to long-term from the United
States and emerging markets including Brazil, India, Russia,
CIS countries, southeast Asia and the Middle East;
-- efforts to increase the average grade of steel production,
which necessitates the use of high-grade iron ore, will
increase China's demand for higher grade iron ore imports;
-- long-term supply constraints, as many of the new projects and
production expansions previously planned by major companies are
experiencing increased costs and delays or have been postponed,
which is expected to delay or reduce the long-term growth of
iron ore supply; and
-- supply growth will continue to fall significantly short of
Iron ore supply growth has consistently fallen below market expectations due
to a number of factors including:
-- the increase in capital costs by over 400% over the last
-- the substantial increase in operating costs;
-- new projects have increasingly required high-cost greenfield
-- governments have demanded higher ownership stakes and taxes;
-- labour supply has been severely limited; and
-- governments have focused increasingly on environmental
The largest three iron ore producers (Rio Tinto, BHP Billiton and Vale)
continue to face significant capital and operating cost inflation which has
resulted in the deferral of many new projects and mine expansions. In
addition, a significant portion of the forecasted increase in industry
capacity is expected to come from higher risk jurisdictions such as Africa
where higher geopolitical risk requires higher returns to warrant capital
In the longer-term, the cost curve plays an integral role in establishing an
effective 'floor' for iron ore prices. Higher marginal cost Chinese capacity
is expected to be needed to meet growing iron ore demand in the medium term.
The average marginal cost of Chinese iron ore production is approximately
US$120/tonne, which provides a strong support level for future iron ore prices
(China import 62% Fe fines).
* * * * * *
This press release should be read in conjunction with LIM's Management's
Discussion and Analysis (MD&A) and audited financial statements for the fourth
quarter and year ended March 31, 2013, available on the company's website at
www.labradorironmines.ca, under the "Financials" section, or on SEDAR
LIM has also filed its Annual Information Form (AIF) and NI 43-101 Technical
Reports, which include the resource estimates disclosed in this press release,
all of which are available on SEDAR (www.sedar.com).
Unless otherwise noted, all references to 'years' in this press release are
'calendar years', all dollar amounts are stated in Canadian dollars and all
tonnes are stated in dry metric tonnes.
* * * * * *
Conference Call and Webcast: Fourth Quarter and Year-End Results
Members of the senior management team will host a conference call and webcast
today at 11:00 am (ET). You may participate in our conference call by calling
647-427-7450 (local and international) or 1-888-231-8191 (Canada and US
toll-free). To ensure your participation, please call five minutes prior to
the scheduled start of the call.
A live audio webcast will be available on LIM's homepage at
www.labradorironmines.ca and archived for 180 days.
For those who are unable to participate in the live conference call, a replay
will be available until the end of day on July17, 2013 by calling
416-849-0833 (local and international) or 1-855-859-2059 (Canada and US
toll-free) and entering the passcode 920 025 96# when prompted.
* * * * * *
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, and through 2012, iron ore sales have totalled 2.0 million dry
tonnes in 13 shipments into the Chinese spot market.
Now in its third year of operations, LIM sold its first and second shipments
of iron ore in June and is targeting 1.75to 2.0 million tonnes of saleable
iron ore production in 2013.
The James Mine is connected by a direct rail link to the Port of Sept-Îles,
Québec. The operation 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 its iron ore
deposits in Labrador and Quebec, all within 50 kilometres of the town of
LIM is currently the only independently-owned Canadian iron ore producer
listed on the Toronto Stock Exchange and trades under the symbol LIM.
Mineral resources that are not mineral reserves do not have demonstrated
economic viability. Inferred mineral resources are considered too
speculative geologically to have economic considerations applied to them that
would enable them to be categorized as mineral reserves. There is no
certainty that mineral resources will be converted into mineral reserves.
The potential tonnage and grade referred to in this press release is
conceptual in nature; there has been insufficient exploration to define a
mineral resource and it is uncertain if further exploration will result in the
target being delineated as a mineral resource.
The terms "iron ore" and "ore" in this document are used in a descriptive
sense and should not be considered as representing current economic viability.
Forward Looking Statement:
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.
For further information, 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) 725-0795
SOURCE: Labrador Iron Mines Holdings Limited
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CO: Labrador Iron Mines Holdings Limited
NI: MNG ERN CONF
-0- Jul/03/2013 10:05 GMT
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