Labrador Iron Mines

Holdings Limited

TSX: LIM

Schefferville Area Properties

Houston Deposits

The Houston deposits are located about 16km southeast of Schefferville. The access to the property is by way of a 4km all-season road from the Schefferville airport and 16km of seasonal gravel road. They comprise three ore bodies: Houston 1, 2 and 3. Iron ore of potential direct shipping quality extends NW-SE for 5km by 150m in its wider zone. Houston purple ore samples have been found to contain the highest Fe grades among the first phase deposits of >65% lump ore and sinter feed with simple crushing and screening. A very low amount of deleterious elements is present.

The Houston deposits comprise 12 mineral rights licenses representing 112 mineral claim units that cover approximately 2,800 hectares situated 15 kms southeast of LIM's James Mine and the Silver Yards processing area. They form part of the Stage 1 planned production at LIM's Schefferville area direct shipping iron ore projects.

Exploration

As a result of drilling and trenching programs carried out by LIM during the 2006 to 2010 field seasons, including 1,804 metres of drilling in 26 holes and 625 samples carried in 2010, a new resource estimate for the Houston deposits was compiled. The new resource of 19.499 million tonnes of measured and indicated represents a 25% increase from the previous estimate announced in April 2010 and more than double the historic resource previously estimated by IOC prior to 1982. The new resource also includes about 1 Mt of manganiferous ore grading about 54.4% Fe and 5% manganese. (see Technical Report on The Houston Deposits February 2011.

The majority of the additional resource has resulted from the drilling of a new mineralized zone located between the Houston 1 and 2 deposits, as well as in-fill drilling within the deposit outlines during 2010.

Subsequently, in March 2011 an independent review was carried out by SGS Canada Inc. on the Houston deposits using the same data and block model as that utilized by the Company in its in-house report on the Houston resource estimate dated February 11th, 2011. SGS used different interpolation and classification parameters, which resulted in a 13% increase in the total tonnage and a slightly lower (<1%) iron grade, for a total resource estimate in excess of 22 million tonnes.

The Houston deposits remain open along strike particularly to the southeast and SGS has made recommendations for further drilling to test these possible extensions.

As a result of this increase, LIM believes the Houston deposits are now of sufficient tonnage to merit evaluation of a stand-alone operation, a new 'South Central Zone', with its own dedicated processing plant, which, subject to environmental assessment, permitting and detailed engineering, is being contemplated to be brought into production in 2013 at a rate of 2-3 Mt per year. This would be in addition to LIM's existing processing plant at Silver Yards.

Geology

The Houston deposit is stratigraphically and structurally controlled, consisting of hard and friable banded blue and red hematite that locally becomes massive. The texture of the high grade mineralization varies from massive compact to fragmental/broken layers of steel grey to red ochre color. The unconsolidated layers can become very friable to sandy in texture, a feature commonly found throughout the Houston deposit.

Previous airmag data suggests that the iron ore is concentrated along the west flank of a modest to strong magnetic feature, which trends approximately N330 degrees. Houston 1 and Houston 2S are not coincident with the strong magnetic feature.

Drilling by LIM carried out during the summer 2008 program indicates that the majority of ore in the Houston deposits occur within the upper iron formation (UIF) and middle iron formation (MIF) with lesser amounts in the SCIF (silicate carbonate iron formation). The amount of red ore associated with the Ruth Formation appears to be minimal if not absent. Ore in several holes is noted to terminate in a red chert, believed to be the Upper Red Chert member that occurs at the boundary of the MIF and SCIF.