Labrador Iron Mines

Holdings Limited

TSX: LIM

Our Commitment

Permitting

LIM's Project is located in a remote area of western Labrador adjacent to the boundary with the Province of Quebec. The mine operations involve the extraction of iron ore in an area of previous iron ore mining and will be carried out using conventional open pit mining methods. Ore will be beneficiated by crushing, washing and screening at the Silver Yard in Labrador and no chemicals will be used in the beneficiation process.

The Company is required to obtain various permits to carry on its activities and is subject to various reclamation and environmental conditions. While it has all necessary permits to complete the exploration work, resource definition work and the engineering study, additional permits will be required to bring the Schefferville Project to production.

The main permits, licenses, approvals, and other forms of authorization required for the development of a mine in Labrador and which shall be necessary for the Company to obtain prior to developing a mine on the Project must be obtained from both the Government of Canada and the Government of the Province of Newfoundland and Labrador.

These consist of a Mining Lease and a Permit to Mine issued under the Mining Act (Newfoundland and Labrador) and an approval and release of the project under the Environmental Protection Act (Newfoundland and Labrador) and the Environmental Assessment Act (Canada). Legislation principally applicable to the permitting process by the Government of Canada includes (i)the Environmental Assessment Act, the Environmental Protection Act and the Species at Risk Act all administered by Environment Canada; (ii) the Fisheries Act administered by Fisheries and Oceans Canada; and (iii) the Navigable Waters Protection Act and the Transportation of Dangerous Goods Act administered by Transport Canada.

Legislation principally applicable to the permitting process by the Government of Newfoundland and Labrador includes (i) the Environmental Protection Act, the Water Resources Act and the Endangered Species Act administered by the Department of Environment and Conservation; (ii) the Mining Act administered by the Department of Natural Resources; and (iii) the Occupational Health & Safety Act and the Workplace Health, Safety and Compensation Act administered by the Department of Government Services. In addition, municipal planning and zoning legislation may have some application to any facilities operated by the Company in the immediate vicinity of Schefferville.

Throughout the environmental studies process, LIM has been consulting with the elders of the various nearby aboriginal communities collecting traditional knowledge in Environmental Assessment and documenting the existing environment. These programs were expanded in 2008 to meet the scope of the proposed development and included detailed assessments of the aquatic and terrestrial ecology, hydrology and groundwater, geochemistry and socio-economic components.

Project Registration Application

In April, 2008, the Company submitted the Project Registration Application for the first phase of development of the Project, being the James North, James South and Redmond properties, to the Department of Environment and Conservation in the Province of Newfoundland and Labrador and to the Canadian Environmental Assessment Agency (CEAA). These properties have been the subject of prior activity carried out by the Iron Ore Company of Canada and are already partially developed. Filing of the Project Registration application followed extensive studies carried out over the prior three years by LIM's engineering and environmental teams. The Registration Document was posted on the Department of Environment and Conservation's website at www.gov.nl.ca.

Environmental Impact Statement (EIS)

In August 2008 the Minister of Environment and Conservation requested an Environmental Impact Statement (EIS) as part of the Application process. In October 2008 the Minister published for public consultation the draft guidelines for the preparation of the EIS. Following this period of public consultation, during which LIM conducted three public meetings in Labrador and in Schefferville, the Final Guidelines were issued by the Minister on December 12, 2008. LIM, in conjunction with its consultants, carried out an extensive program to prepare the EIS based initially on the draft guidelines and then amended based on the Final Guidelines and using the extensive environmental data and studies that had been collected and undertaken by LIM over the previous three years. The EIS was submitted to the Minister on December 22, 2008 and was registered on December 23, 2008.

The Canadian Environmental Assessment Agency (CEAA) completed its review of the Project and has determined that a federal level Canadian Environmental Assessment is not required. This decision was made following the recent receipt of a determination by the Department of Fisheries and Oceans, that a Harmful Alteration, Disruption, or Destruction authorization will not be required for the Project. Other federal agencies, including Environment Canada, Transport Canada, Natural Resources Canada, Health Canada and the Canadian Transportation Agency, have also completed their reviews and confirmed that they had no triggers for a federal level environmental assessment. In addition, the Major Projects Management Office has declared that the Project does not constitute a major natural resources project.

In March 2009 the Minister of Environment and Conservation requested some additional information to supplement the EIS. This additional information is now being compiled and is scheduled to be submitted to the Minister at the end of July 2009. Following this submission there will be a 50 day period for public comment and the Minister will then have up to a further 20 days to decide upon the acceptability of the EIS. This additional information was compiled and a Revised Environmental Impact Statement submitted to the Department of Environment and Conservation in August 2009.

EIS Review Completed

Upon release, LIM will submit the applications for the necessary operating permits and licenses. Assuming these permits and licences are issued during the fourth quarter of calendar 2009, the Company is planning to commence initial site construction during the winter of 2009-10, ahead of the commencement of commercial production, which is currently scheduled for the middle of calendar 2010.