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Schefferville Area Projects

James
Redmond
Knob Lake
Houston & Malcolm
Sawyer Lake
Astray Lake
Kivivic No. 1 & 2
 
Location
Geology
Deposit Types
Mineral Resources & Reserve Estimates
Transportation & Infrastructure
Mining & Processing
Iron Ore Product & Markets

Mineral Resource & Reserve Estimates

Overview

LIM is engaged in the production and development of its 100%-owned direct shipping iron ore (DSO) deposits located in the Labrador Trough of western Labrador and northeastern Quebec. The 20 DSO deposits, the majority of which are located within 50 km of the town of Schefferville, form part of the historical operations carried out by the Iron Ore Company of Canada (IOC), in which IOC identified 250 million tonnes of historic reserves and resources.

NI 43-101 Compliant Resources

As at March 31, 2014, LIM had NI 43-101 compliant measured and indicated mineral resources of approximately 54.8 million tonnes at an average grade of 56.8% iron (Fe) and an inferred resource of 4.8 million tonnes at an average grade of 55.7% Fe on the Schefferville Projects. In addition, LIM also holds some previously-mined stockpiles with a confirmed NI 43-101 compliant, indicated resource of approximately 3.5 million tonnes with an average grade of 49.1% Fe and an inferred resource of approximately 2.9 million tonnes with an average grade of 48.8% Fe at March 31, 2013. These stockpiles are located within 15 km of the Silver Yards processing plant and form part of LIM's Stage 1 deposits.

Area -- Ore Classification Tonnes
(x1000)
Fe%
SiO2%
Mn%
Redmond 2B -- Fe Indicated 518 59.1 5.8 0.4
Redmond 5 -- Fe Indicated 1,576 55.0 11.8 0.8
Knob Lake -- Fe Measured 2,824 55.0 10.2 1.0
Indicated 2,259 54.3 11.2 1.1
Total (M+I) 5,083 54.7 10.7 1.0
Denault -- Fe Measured 4,167 54.9 9.6 0.9
Indicated 507 53.2 12.0 0.8
Total (M+I) 4,674 54.7 9.9 0.8
Houston -- Fe Measured 24,385 57.9 13.1 0.8
Indicated 5,736 56.8 14.8 0.8
Total (M+I) 30,121 57.7 13.4 0.8
Malcolm-1 -- Fe Measured 2,347 60.2 9.8 0.8
Indicated 6,686 57.1 12.3 0.8
Total (M+I) 9,060 57.9 11.6 0.8
Total Resource -- Fe Measured 33,750 57.5 12.2 0.8
Indicated 17,282 56.4 12.7 0.8
Total (M+I) 51,032 57.1 12.4 0.8
Knob Lake -- Mn Measured 375 50.6 8.5 5.6
Indicated 214 49.6 9.6 4.9
Total (M+I) 589 50.2 8.9 5.3
Denault -- Mn Measured 1,443 52.1 6.0 6.4
Indicated 361 51.7 6.6 6.5
Total (M+I) 1,804 52.0 6.1 6.4
Houston -- Mn Measured 1,099 53.7 10.1 5.2
Indicated 106 53.4 11.7 4.6
Total (M+I) 1,205 53.6 10.3 5.1
Malcolm 1 -- Mn Measured 13 58.4 7.7 4.3
Indicated 149 54.1 11.9 4.6
Total (M+I) 162 54.5 11.6 4.5
Total Resource -- Mn Measured 2,930 52.5 7.9 5.8
Indicated 830 51.8 9.0 5.5
Total (M+I) 3,760 52.3 8.1 5.7
Total Resource --
Fe & Mn
Measured 36,680 57.1 11.9 1.2
Indicated 18,112 56.2 12.6 1.0
Total (M+I) 54,792 57.1 12.1 1.1


Inferred Mineral Resource Estimates (as at March 31, 2014)

Area -- Ore Classification Tonnes
(x1000)
Fe%
SiO2%
Mn%
James -- Fe Inferred 232 52.7 21.7 1.0
Redmond 2 -- Fe Inferred 25 57.2 5.9 0.7
Redmond 5 -- Fe Inferred 60 52.3 11.3 1.7
Knob Lake -- Fe Inferred 644 51.8 13.5 1.2
Houston -- Fe Inferred 2,707 57.5 13.7 0.9
Malcolm 1 -- Fe Inferred 520 56.4 12.9 0.8
Knob Lake -- Mn Inferred 127 49.2 9.7 4.8
Houston -- Mn Inferred 455 53.4 11.2 4.9
Total Inferred Resource -- Fe & Mn 4,770 55.7 13.6 1.4

Stockpiles Mineral Resource Estimates (as at March 31, 2014)

Stockpiles Classification Tonnes
(x 1000)
Fe% SiO2%
Mn%
P%
Al2O3%
Wishart Indicated 1,151 48.6 27.1 0.1 0.04 0.50
Inferred 1,280 48.2 27.5 0.1 0.04 0.50
Ferriman 1 (C&D) Indicated 2,394 49.3 21.6 1.2 0.05 1.01
Inferred 1,616 49.3 22.1 1.2 0.05 0.87
Total Resource Indicated 3,545 49.1 23.4 0.8 0.05 0.84
Inferred 2,896 48.8 24.5 0.7 0.05 0.71


Elizabeth Taconite

LIM also holds a NI 43-101 compliant mineral resource estimate for the Elizabeth Taconite Project, (as at June 15, 2013) comprising two adjacent deposit areas, located approximately four km from the Company's currently producing James Mine. Approximately 620 million inferred tonnes at an average grade of 31.8% Fe have been estimated in Elizabeth No. 1 and a potential 350 million to 600 million tonnes at an average grade 31.9% Fe have been estimated in Elizabeth No. 2. Taconites require further upgrading through a concentrator involving a major capital investment to produce a saleable iron ore product.

Elizabeth Taconite Mineral Resource Estimate (NI 43-101 compliant) as at June 15, 2013

Inferred Mineral Resource

Zone
Solids

Million Tonnes

Fe
%

Satmagan %2

Al2O3
%

CaO
%

MgO
%

SiO2
%

Mn
%

P
%

Magnetite Taconite

200

410

32.8

29.2

0.08

1.8

2.1

43.6

0.8

0.01

Hematite Taconite

100; 300

210

29.8

3.4

0.6

0.9

2.6

39.3

1.15

0.04

Total Inferred

100; 200; 300

620

31.8

20.5

0.3

1.5

2.3

42.1

0.9

0.02

Note 1: Tonnage is based on dry tonnes. The resources are not reported within an economic pit shell. Based on a cut-off of 26% Fe for hematite taconite and 14% Satmagan for magnetite taconite.

Note 2: Satmagan: Saturation magnetization analyzer - an instrument used for measuring the magnetic material (usually in the form of % magnetite) content of the sample.

Elizabeth Taconite No. 2 Potential Tonnages and Grades 1

Potential
Tonnage

Zone
Solids

Million Tonnes

Fe
%

Satmagan
%
2

Al2O3
%

CaO
%

MgO
%

SiO2
%

Mn
%

P
%

Magnetite Taconite

400

300 - 500

32.4

32.7

0.3

1.8

2.4

43.8

0.9

0.01

Hematite Taconite

500

50 - 100

29.5

1.4

0.3

1.0

4.0

34.6

1.6

0.05

Total Potential

400; 500

350 - 600

31.9

27.8

0.3

1.7

2.65

42.3

1.0

0.02

Note 1: Figures in the table of potential tonnage do not comprise NI 43-101 defined mineral resources, however, they do provide an inventory of exploration potential tonnage and grade per ore type, based on a cut-off of 26% Fe for hematite taconite and 14% Satmagan for magnetite taconite. This potential tonnage and grade is conceptual in nature and there has been insufficient exploration to define a mineral resource. It is uncertain if further exploration will result in such potential being delineated, in whole or in part, 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 hole intercepts which define the width and estimated grade at its southeastern extent.

Note 2: Satmagan: Saturation magnetization analyzer - an instrument used for measuring the magnetic material (usually in the form of % magnetite) content of the sample.

Qualified Person

The resource estimates for LIM's Schefferville Projects have been prepared by Maxime Dupéré, P. Geo of SGS Canada Inc. who is an Independent Qualified Person within the meaning of NI 43-101.

The resource estimate for LIM's Elizabeth Taconite Project have been prepared by George H. Wahl, GH Wahl & Associates Consulting, who is an Independent Qualified Person within the meaning of NI 43-101.

Michel Cormier, Vice President, Exploration of the Company is a Qualified Person within the meaning of NI 43-101.




Historical Resource & Reserve Estimates

Except for the current NI 43-101 resource estimates, the majority of the resources within LIM's DSO deposits remain historical based on prior data and reports prepared by IOC, the previous operator. The historical estimates are not current and do not meet the standards prescribed by NI 43-101. They provide an indication of the potential of the properties and are relevant to ongoing exploration and evaluation.

The IOC-estimated mineral resources and reserves were published in their Direct-Shipping Ore (DSO) Reserve Book prepared in 1983. The estimate was based on geological interpretations on cross sections and the calculations were performed manually. IOC categorized all their estimates as 'reserves'. SNC-Lavalin in its 2007 Technical Report for LIM adopted the principle that these should be categorized as 'resources' as defined by NI 43-101.

The following historic reserve estimates were based on economics of 1983 and that although the geological, mineralogical and processing data will be the same today, economics and market conditions will have changed.

The historical IOC resources were prepared using natural analysis and have been converted to dry tonnes as shown in the table below.

Summary of Historical IOC Mineral Resource Estimates in Labrador
(Non-compliant with NI 43-101)

Iron Resources
Manganese Resources
Property
Tonnes
(x 1000)
Fe%
SiO2%
Tonnes
(x 1000)
Fe%
SiO2%
Mn%
Astray Lake
7,271
65.6
4.2
--
--
--
--
Howse
25,687
63.7
5.5
--
--
--
--
Sawyer Lake
11,520
64.4
11.9
--
--
--
--
Gill
4,149
55.9
11.7
269
48.7
10.2
10.2
Green Lake
329
57.1
8.7
--
--
--
--
Kivivic 1
6,004
59.2
9.3
--
--
-
--
Ruth Lake 8
373
58.6
10.6
--
--
--
--
Wishart
188
59.0
13.4
--
--
--
--
Wishart 2
499
57.8
14.3
--
--
--
--
Total
56,020
63.5
7.6
269
48.7
10.2
10.2


Summary of Historical IOC Mineral Resource Estimates in Quebec
(Non-compliant with NI 43-101)


Iron Resources
Manganese Resources
Property
Tonnes
(x 1000)
Fe%
SiO2%
Tonnes
(x 1000)
Fe%
SiO2%
Mn%
Barney 1
5,665
59.8
8.5
56
54.4
3.9
5.5
Eclipse
33,963
61.6
5.7
1,890
54.6
4.9
4.5
Fleming 6
700
55.3
10.1
20
48.2
8.0
8.4
Fleming 7S
1,777
61.3
8.3
--
--
--
--
Fleming 9
383
58.9
9.7
--
--
--
--
Lance Ridge
1,249
59.1
9.3
256
45.5
6.3
11.3
Partington 2
3,107
60.0
10.0
--
--
--
--
Wollett 1
2,052
51.6
6.5
--
--
--
--
Star Creek 1
1,331
57.2
8.2
1,759
51.5
7.0
7.3
Star Creek 3
56
61.9
9.4
--
--
--
--
Sunny 3
421
63.1
7.3
--
--
--
--
Trough 1
1,715
56.0
9.8
200
50.3
7.5
6.7
Total
52,420
60.9
6.8
4,182
52.5
6.0
6.2

Notes:

The classification used in the IOC reports are as follows:

Measured: The ore is measured accurately in three dimensions. All development and engineering evaluations (economics, ore testing) are complete. The deposit is physically accessible and has a complete pit design. The reserve is economic and is marketable under current conditions.

Indicated: Development and engineering evaluations (economics, ore testing) are complete. Deposits in this category do not meet all the criteria of measured ore.

Inferred: Only preliminary development and evaluation are completed. Deposits may not be mineable because of location, engineering considerations, economics and quality.

The above shown terms, definitions and classification are not compliant with NI 43-101 but were used by IOC for their production reports. Current compliant mineral resources are categorized on the basis of the degree of confidence in the estimate of quantity and grade or quality of the deposit, as follows:

Inferred mineral resources
Indicated mineral resources
Measured mineral resources

Compliant mineral reserves are that part of a measured mineral resource or indicated mineral resource which can be extracted legally and at a profit under economic conditions that are specified and generally accepted as reasonable by the mining industry and which is demonstrated by a preliminary feasibility study or feasibility study as follows:

Probable mineral reserve and
Proven mineral reserve

There is no reason to conclude that IOC utilized other than best industry practices. It is reasonable, therefore, to conclude that such historic resources can be easily brought to compliance with NI 43-101 requirements with a program of verification as recommended in the SNC-Lavalin Technical Report.

The tonnages shown are Measured and Indicated resources (or by IOC classification Measured and Indicated reserves);

The tonnages shown are Inferred resources (or by IOC classification Inferred reserves);

The tonnages shown are Inferred resources (or by IOC classification Inferred reserves), estimated for Astray Lake based on 200, 300 and 400 feet vertical projections and for Sawyer Lake projections from a surface mapping exercise.

Historical tonnages was previously reported on a natural basis and have been converted to dry tonnes, as shown in the tables above.

The terms "measured", "indicated" and "inferred" used in the tables and the notes above describing resources and reserves have the meaning given to them in the IOC reports described above which meanings are not the same as those prescribed under NI 43-101.

The grade of IOC's direct shipping iron ore operations in Schefferville were historically reported to have been between 56-58% Fe. It is expected, based on historic operations and as reported in IOC records, that the grade of LIM's deposits will be in a similar range. It is not possible to give precise grades for each of the deposits until the resources have been verified and brought into compliance under NI 43-101.

Gill Mine
This property was explored with 14 trenches (603 m) (2008). The estimated resources are based on IOC data. Despite being a former iron ore producer (1954-1957), LIM has currently very little mining data with which to verify the resources in this location.

Ruth Lake 8 Deposit
The Ruth Lake 8 deposit was discovered by IOC in 1948. IOC carried out extensive mapping, trenching, geophysical surveys and drilling on the deposit up until 1977. Other than the location of the ore body in IOC assessment maps, there is no other supporting data available to LIM that would allow a resource calculation. Prior to the closing of the Schefferville area mines by IOC, this deposit was stripped of overburden in preparation for mining and three large diameter dewatering wells were installed. The ore is noted to be 75% blue and has an erratic distribution with a maximum depth of 122m. The 1983 IOC Inventory of resources lists the Ruth Lake 8 resource at 373,000 dry tonnes at 58.6% Fe and 10.6% SiO2.

Wollett 1
The Wollett 1 property, located within the province of Quebec and approximately 11 km north-northwest of the town of Schefferville, is accessible by existing gravel roads. This resource was delineated by IOC. The mineralization lies along the south east shore of Lake Vacher on gently sloping ground. Overburden in the area is generally 2 to 5 m thick. The mineralization is a mix of the red, yellow and blue ore types. Historical resources for Wollett 1 given in the 1983 IOC Inventory of Resources are 2.05 million dry tonnes at 61.6% Fe and 6.5% SiO2.

Lance Ridge
The Lance Ridge deposit is accessible by existing gravel roads and is located in Quebec approximately 5 to 8 km north-northwest of Schefferville. This property lies 1.5 km northwest from the Star Creek property. It is a combined iron/manganese resource. Lance Ridge 1 is an enriched iron deposit that contains several zones of manganese mineralization. IOC trenched, sampled and drilled the deposit in 1970. The area of enrichment is generally covered by 3 to 7 m of glacial till and does not outcrop. IOC outlined an area of high manganese by trench sampling. Their analyses ranged from 30% to 31% Mn. Historical resources for Lance Ridge given in the 1983 IOC Inventory of Resources are 1.25 million dry tonnes at 59.1% Fe and 9.3% SiO2.

Star Creek 1
The Star Creek 1 deposit is accessible by existing gravel roads and is located in Quebec approximately 5 to 8 km north-northwest of Schefferville. The deposit is located 2 km to the west of the Denault showing. The mineralization is a mix of the red-yellow and blue types. The Star Creek 1 Deposit was partially mined out by IOC; however, an iron and manganese resource remains in place. Recent work by a previous claim holder suggests that stockpiles immediately to the east of the open pit may contain further manganese resources. Historical resources given in the IOC 1983 Inventory of resources are 1.4 million dry tonnes at 57.4% Fe and 8.2% SiO2 and a manganese resource of 1.75 million dry tonnes at 51.5% Fe, 7.0% SiO2 and 7.3% Mn.

Fleming 6, 7S and 9
The Fleming deposits are located approximately 15 northwest of Schefferville and can be reached by existing gravel roads. The deposits are composed of iron bearing hematite ore. Historical resources given in the 1983 IOC inventory of Resources are 2.86 million dry tonnes at 59.5% Fe and 8.9% SiO2.

Howse Deposit
The Howse No. 1 deposit occurs in a broad syncline with tight second order folds in the hinge area. The hinge area of the first order syncline is faulted by a major reverse fault dipping steeply to the northeast. A major northeast-southwest striking cross fault separates the deposit into two parts. In the southern part, the ore zone has a surface width of about 76 m (250 ft.). In the northern part, the ore zone has a width averaging about 152 m (500 ft.) and both limbs of the syncline in iron formation are preserved (NMI, Fe_028). The 1983 IOC Inventory of Resources lists the resource for Howse at 25.7 million dry tonnes at 63.7% Fe and 5.5% SiO2.

Barney
The Barney deposit occurs in a northwest trending synclinal feature. Average depth of the ore is listed at 60 m (180 ft.) At present, very little is known about the deposit other than its location and the 1983 IOC resource given as 5.66 million dry tonnes grading 59.8% Fe and 8.5% SiO2. A manganese resource of 56,000 tonnes at 54.4% Fe, 3.9% SiO2 and 5.5% Mn is also recorded.

Astray Lake and Sawyer Lake Properties
The Astray and Sawyer deposits form the South Zone. The current interpretation of the Astray Lake deposit is based on a compilation map dated November 1950. The map shows several mineralized rock sample results over a strike length of some 500 metres each. The Sawyer Lake deposit covers some 6.5 hectares over an approximate strike length of 300 metres and is of irregular shape located on top of a hill. Rock samples were taken and showed high grade massive hematite mineralization. The historical resources for Astray Lake are 7.3 million dry tonnes at 65.6% Fe and 3.9% SiO2. For Sawyer Lake, the 1983 historical resources are 11.5 million dry tonnes at 64.4% Fe and 11.9% SiO2.

Kivivic 1, Eclipse, Partington 2, Trough 1
The Kivivic, Eclipse, Partington and Trough deposits form the North Zone. The Kivivic deposit in Labrador and the Eclipse, Trough and Partington deposits in Quebec are located between 40 km to 85 km northwest of Schefferville but will require substantial infrastructure and building of road and rail access. All four of these deposits are based on historical resources which will require additional exploration to bring them to compliance, as well as metallurgical testing. The 1983 IOC historical resources for Kivivic are 6.0 million dry tonnes at 59.2% Fe and 9.3% SiO2.

For Eclipse, the 1983 historical resources are 34.0 million dry tonnes at 61.6% Fe and 5.7% SiO2, in addition to a historical manganese resource of 1.9 million dry tonnes at 54.6% Fe, 4.9% SiO2 and 4.5% Mn.

The Partington deposit contains a 1983 historical resource of 3.1 million dry tonnes at 60.0% Fe and 10.0% SiO2. The Trough 1 deposit contains a 1983 historical resource of 1.7 million dry tonnes at 56.0% Fe and 9.8% SiO2, in addition to a historical manganese resource of 200,000 dry tonnes at 50.3% Fe, 7.5% SiO2 and 6.7% Mn.





 

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