Labrador Iron Mines

Holdings Limited

TSX: LIM

Schefferville Area Properties

Mining & Beneficiation

Mining
Minimal additions to the current existing infrastructure are required for production start-up. It is the intention of LIM to outsource as large a portion of direct production operations to experienced contractors and facility operators as is practical both from an operating and from a financial standpoint. As was the case with IOC, all mining operations will be by conventional open pit mining methods. Relatively low stripping ratios of waste to ore will be mined during the life of the operations.

The working period is assumed to start in April and to continue to November with a work stoppage of four months during the winter. The contractor will mobilize every year in the beginning of April to fix roads and service lines, assure adequate supplies and rehabilitate the operating pits to a working condition after winter. LIM will perform all mine planning, survey and resource/grade control with their own personnel.

The mining contractor will provide all equipment to drill, blast, load and haul ore, waste rock and top soils to the designated locations. Because of the short distance from the James and Knob Lake deposits, ore transport to the processing and shipping site would most likely not require an additional haulage fleet because the mining trucks could be used. Waste will be hauled to the specific waste dump sites. For the Astray Lake and Sawyer Lake deposits, a barge loading and unloading cycle may be utilized in addition to truck hauling.

The washing and screening process will remove low grade and silica material which will increase the grades of the final product by about 10-15% of the mined grade. There are no chemicals used in the proposed process and waste fine material will be redeposited in an existing open pit. Testing has shown that most of the ore is "self draining", hence low moisture content is anticipated. LIM intends to evaluate washing and screening of the ore to improve the quality and grade of the iron ore products and to ensure a greater degree of consistency in the production of lump ore and sinter fines.

During the IOC operations, the yellow ores (limonitic), the low grade iron ores (TRX) and high silica ores (HISI) were separated during the mining process and stockpiled as waste or for possible blending. LIM plans to evaluate the potential for further processing of the yellow ores to produce a saleable product.

It is noted that IOC mined over 150 million tonnes during its 28 years of operation at Schefferville. This equates to over 5 million tonnes per annum. LIM plans to start production at a lower annual level but this historic production figure does provide a reasonable production target.