Labrador Iron Mines

Holdings Limited

TSX: LIM

Schefferville Area Properties

Mineral Resource & Reserve Estimates

The properties comprising LIM’s Schefferville Area Projects were part of the original IOCC Schefferville holdings and formed part of the 250 million tons of reserves and resources identified but not mined by IOCC in the area. Except for the new resource estimates described below, the majority of the resource estimate is historical based on prior data and reports prepared by IOCC, 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.

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

New resource estimates for James and Redmond deposits

On November 12, 2009 LIM reported new independent resource estimates prepared by SGS Geostat Ltd., Blainville, Quebec, (Qualified Person Maxime Dupéré, P.Geo,) in accordance with NI 43-101, for its James, Redmond 2B and Redmond 5 deposits comprising the first stage of targeted production. The classification of resources was completed using the results of drilling and trenching carried out by LIM during the 2006, 2008 and 2009 field seasons, which comprised twinning, in-fill and step-out drilling and trenching, as well as drill and trench data previously conducted by IOC.

James deposit

The new resource estimate for the James deposit was based on 990 metres of reverse circulation drilling in 16 holes and 515 metres of trenching carried out by LIM, in addition to 5,800 metres of drilling and 3,000 metres of trenching previously carried out by IOC. The mineral deposit resource estimates were calculated using the inverse distance squared method. The SGS Geostat resource estimates for the James deposit of 8.1 million tonnes at a grade of 57.7% iron in the Indicated category represent an increase of 100% over the historical resource of 4,006,000 tonnes.

Redmond 5 deposit

The new resource estimate for the Redmond 5 deposit was based on 964 metres of reverse circulation drilling in 20 holes and 461 metres of trenching carried out by LIM, in addition to 1,370 metres of drilling previously carried out by IOC. The SGS Geostat resource estimates for the Redmond 5 deposit, of 2.1 million tonnes at a grade of 54.9% iron in the Indicated category, represent an increase of 220% in mineral resources over the historical resource of 650,000 tonnes.

Redmond 2B deposit

The new resource estimate for the Redmond 2B was based on 1,100 metres of reverse circulation drilling in 21 holes and 663 metres of trenching carried out by LIM. The SGS Geostat resource estimates for the Redmond 2B deposit, of 0.85 million tonnes at a grade of 59.8% iron in the Indicated category, represent an increase of 45% in mineral resources over the historical resource of 580,000 tonnes.

Other than the foregoing new resource estimates, 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 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.

Summary of Historic IOC Mineral Resource Estimates (1,000 tons) (The estimates are not compliant with NI 43-101 and are based on historical standards used by IOC).

Notes: 1 The tonnages shown are Measured and Indicated resources (or by IOC classification Measured and Indicated reserves);

Note:7 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.

In 1995 Kilborn Inc. (at that time an independent engineering company with the head office in Toronto) carried out a project Development Plan study for Hollinger North Shore Exploration Inc. The historic reserve estimates of IOC, prepared in 1982, for the Labrador and Quebec properties were reviewed. The processing estimates were based on metallurgical test work carried out by Lakefield in 1988 and 1989. Kilborn did not produce a NI 43-101 qualified resource statement.

Knob Lake Property
The Knob Lake deposit is shown on eight original IOC sections 30 metres apart which represents a strike length of about 500 metres. Not all sections within this strike length have yet been recovered. Some 25 drill holes have been drilled on this property which includes one hole drilled by LIM. Details of the IOC resource estimate will be verified in the future program through drilling and sampling.

Houston 1, 2S and 3 Property
The Houston Properties (1, 2S and 3) have a strike length of some 800 metres, 1,000 metres and 2,400 metres respectively. LIM has some 29 sections, 100 feet (30 metres) apart, of the Houston 1 deposit from the files of IOC, showing the different ore zones and the drilling information of some 25 drill holes. The IOC information on the Houston 2S deposit is shown on some 23 sections also 100 feet (30 metres) apart which show the results of some 20 drill holes. No detailed analysis of the results has yet been made. Details of the IOC resource estimate will be verified in the future program through drilling and sampling.

Astray Lake and Sawyer Lake Properties
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 ha 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.

Howse and Kivivic Properties
The Howse deposit has been drilled by IOC but the detailed information has not yet been fully analyzed by LIM. LIM carried out a field exploration program of rock and old drill cutting sampling, mapping and surveying of old drill holes. It is reasonable to believe that the resource estimate from IOC was developed on some drilling/trenching results, details of which are not currently available).