Labrador Iron Mines

Holdings Limited

TSX: LIM

Corporate Information

Common Shares

Corporate Overview

LIM's twenty DSO hematite iron ore deposits are situated in the Labrador Trough region of the province of Newfoundland and Labrador and the Province of Quebec (the "Schefferville Area Projects")near the town of Schefferville, Quebec. Through its wholly-owned subsidiaries, the Company holds 36 Mineral Rights Licenses covering 9,875 hectares in western Newfoundland and Labrador, as well as 218 Mining Rights covering approximately 9,014 hectares in the Province of Quebec and, subject to obtaining certain regulatory and government consents and approvals, an exclusive operating interest in 22 mining leases covering 2,036 hectares in the Schefferville Area of Quebec.

The deposits were part of the original Iron Ore Company of Canada (IOC) direct shipping Schefferville operations conducted from 1954 to 1982 and formed part of the 250 million tons of reserves and resources previously identified by IOC. LIM's deposits have a historical resource estimated to be approximately 150 million tons of direct shipping iron ore, based on work carried out by the IOC prior to the closure of its Schefferville operations in 1984. With the exception of the resources for the James, Redmond 2B and Redmond 5 deposits, for which a resource estimate compliant with the standards prescribed by NI 43-101 has been prepared by SGS-Geostat, the historic estimate was prepared according to the standards used by IOC and, while still considered relevant, is not compliant with National Instrument 43-101 ("NI 43-101").

The development plans for the Schefferville Area Projects envision the development of the deposits in four stages, the first stage of which will be undertaken in three phases, comprising the deposits closest to existing infrastructure. The first phase of Stage 1 comprises the James and Redmond deposits and the second comprises the Houston and Knob Lake deposits, all in Labrador. Subsequent to the receipt on February 12, 2010 of formal confirmation of the release of the first phase of Stage 1 of the project by the government of Newfoundland and Labrador, LIM has submitted the necessary permit and licence applications required to allow construction to commence.

The James and Redmond deposits are brownfield with low strip ratios where a large amount of pre-stripping has already taken place. The entire operation will use well proven and relatively basic technology, including conventional open pit mining and a chemical-free beneficiation process (crushing, washing and screening. The material excavated averages 56% to 58% iron with beneficiation removing unwanted silica and increasing the product grade to around 65% iron.

Concurrent with the development of the phase 1 deposits, planning for the future development of the more distant deposits in subsequent phases is envisioned. The Astray and Sawyer deposits, located approximately 50-60km southeast of Schefferville, do not currently have road access but can be reached by float plane or by helicopter. The Howse and Kivivic deposits are located approximately 21km and 40km to the northwest of the James deposit, respectively, and both can be reached by existing gravel roads.

Subject to the receipt of applicable permits and approvals, LIM expects to commence first commercial production of iron ore in mid-2010. Mining and processing operations will be conducted for eight months per year, from April to November at an anticipated initial mining rate of 6,000 tonnes per day. LIM is planning for production in the first year to be up to 1 million tonnes per annum, growing to 2-3 million tonnes per annum in 2011-2012.

The Project envisions two iron ore products - the first a coarse lump ore, and the second a finer sinter feed product. Approximately one-quarter of the product is expected to comprise lump ore which has generally commanded a premium price in the market over fines. These products are to be transported by the existing railroad systems to the port of Sept-Iles on the St. Lawrence River for onward shipping, initially to steel mills in Europe and possibly Asia.

A test mining program to excavate 6,500 tonnes of bulk ore samples from the first phase deposits was carried out in October 2008 by RSM Mining from Labrador City. This material was crushed and screened producing lump and sinter fine ore samples, some of which were shipped for market testing to potential end users primarily in Europe. LIM's products received a very encouraging level of interest for their high iron grades and low level of impurities. On November 24, 2009 the Company announced results of chemical, physical and metallurgical testing of James South lump and sinter fines ore by SGA research centre in Germany, an independent process laboratory specializing in iron and steel process testwork. SGA concluded that the ore showed excellent metallurgical characteristics and should be attractive to steel mills. The products that were moved in LIM's bulk sample process were the first iron ore shipments to leave the Schefferville area in over a quarter of a century.

Marketing discussions have commenced with potential end users, particularly in Europe and samples have been dispatched to a number of steel mills. These discussions have indicated an encouraging level of interest in the LIM products based on the metallurgical test results and analysis of the samples supplied. The indicated high iron grades and the low level of impurities are important and should ensure that LIM will be able to market both its lump ore and its sinter fines products. In addition to the European interest there is significant Chinese interest in seeking iron ore from Eastern Canada. The growing Chinese demand for iron ore, coupled with the slower than expected development in new iron ore mines closer to China, has begun to make Eastern Canada a viable source for this market. Discussions continue with a number of Chinese customers and importers.