Labrador Iron Mines

In September 2013, LIM entered into a joint venture with Tata Steel Minerals Canada (TSMC) for the exploration and development of LIM's Stage 3 Howse Deposit (the "Howse JV Agreement"). The Howse Deposit is located in Labrador about 25 kilometres north of LIMâ€™s Silver Yards facility and adjacent to TSMCâ€™s Timmins DSO Project and processing plant.

On April 2, 2015, LIM reported that it has completed a transaction pursuant to the provisions of its Joint Venture Agreement whereby TSMC has acquired LIM's remaining interest in the Howse Project for $5.0 million.

Under the Howse Joint Venture Agreement entered in September 2013, TSMC had the right to purchase LIM's interest in the joint venture for fair market value in certain circumstances including the taking of any proceedings with respect to a compromise or arrangement, or a change in control of LIM.

TSMC has exercised its rights under the terms of the Joint Venture Agreement to acquire LIM's remaining interest. LIM believes the agreed sale price of $5.0 million is a fair consideration in the current market circumstances and that this transaction was the best available way to monetize a non-core asset.

Since March 2013, the two companies have been co-operating with each other through various multi-part co-operation agreements in the areas of logistics, property rationalization and various ancillary mutual support arrangements.

As part of the logistics agreements, LIM and TSMC formalized arrangements for construction of a new rail line that extends the rail line from LIM's Silver Yards facility to TSMC's new Timmins Area processing plant. This new rail line, which was completed during 2014, is now operational and connects both companies to the TSH main rail line. Going forward, LIM and TSMC will continue to co-operate in various aspects of their respective iron ore operations in the Schefferville area.

Howse Deposit

Geology
Ore grade material of the Howse 1 deposit is found largely in the Middle (Pink-Grey Cherty (PGC)/Upper Red Cherty (URC) Sub-Member and Lower Red Cherty (LRC) Sub-Member) and Lower Iron Formation (LIF). Members of the Sokoman Formation and in the Jaspilite (JSP) horizon of the Ruth Formation. Drill cuttings found nearby old drill sites indicate that the mineralization is fine grained and of similar characteristics to the Houston deposit.

In the PGC/URC the blue hematite is bright, cindery and vuggy. Martite and sometimes limonite occur. Granules are generally present. The LRC is composed of blocky, massive, cindery blue hematite. It is generally oolitic. In the LIF, massive blue hematite and sometimes red hematite occurs. The JSP horizon is composed of bright to steel grey blue hematite and is rich in martite. Some horizons are granule rich with large deformed granules.