Labrador Iron Mines

Holdings Limited

TSX: LIM

Schefferville Area Properties

Transportation & Infrastructure

Construction

In September 2010, site preparation and construction commenced on the process plant at the Silver Yard and for the accommodation camp at Bean Lake. Today these stand completed with the first phase of the plant having been commissioned.

Track panels were constructed in 40 foot lengths at LIM's Centre Ferro facility in Sept-Iles and transported by rail to the spur line site for immediate installation.

The spur line railway follows an existing rail bed used during the time of the Iron Ore Company of Canada operations. Additional road bed ballast is being added using air dump cars.


Air Dump Ballast Cars

Existing Local Infrastructure

The project benefits from and relies upon the significant level of pre-existing infrastructure put in place by the Iron Ore Company of Canada (IOC) for its previous mining operations. It is the existence of extensive infrastructure facilities, the majority of which are in sound operational condition, that provide LIM with a strong competitive advantage and low risk start-up. It will also ensure that new build facilities will be kept to a minimum so as to limit the impact of the project on both the physical and the social environments.

Town of Schefferville

The town of Schefferville, Quebec is located approximately 2 km from the Labrador border on the north shore of Knob Lake. The town was established by IOC in 1954 to support mining operations in the area and economic activity there has been largely dependent on the iron ore industry. The township provides some key infrastructure including roadways, power and water supply, buildings and sewage facilities, as well as an airport which has daily flights from Montreal, Quebec and Sept-Iles.

Menihek Hydro Plant

The Menihek power plant located 35km southeast of Schefferville is the only provider of electric power to the area. The power plant contains two 5 MW Westinghouse generators and one 12 MW unit, sufficient to supply the power that LIM would require for the early development sites close to Schefferville (James, Knob Lake and Redmond).

Roads

Most of the roads that provide access to the different properties designated for early development (James, Houston, Knob Lake and Redmond) already exist and require minimal upgrade.

The Railway

The TSH section of the track is only now actively hauling LIM's iron ore after operating a service from Schefferville to Sept-Iles for passenger and light freight traffic from the time IOC closed operations. LIM is using this existing railway connection operated by TSH where it then connects to the Quebec North Shore & Labrador Railway (QNS&L) which operates the 360km of rail from Emeril Junction, down to the Port of Sept-Iles. Under Canadian Federal legislation each rail operator is designated as a Common Carrier and is obliged to provide a suitable level of service. LIM has agreements in place with both of these carriers.

An independent preliminary study of the TSH railway was carried out for LIM in August 2006 by Hatch Mott MacDonald (Hatch) which concluded that the Menihek Subdivision is in very good condition despite more than 20 years of under capitalization. However, some of the tracks, rails and culverts require refurbishing and a repair and replacement program is recommended to take place over a number of years. LIM is negotiating with TSH regarding freight rate terms for the transport of any ore produced in calendar 2011.

To support the transfer of the bulk sample iron ore to the Port of Sept-Iles, in 2008 LIM leased ten 90-tonne gondola ore cars and rented five ballast cars from TRTI. The gondola cars will become part of the future leased transport fleet that will include additional ore cars as well as main line and shunting locomotives. In 2008 bulk sample products were successfully transported by rail from Schefferville to Sept-Iles over both the TSH track and track operated by QNS&L. The products that were moved in LIM's bulk sample process and later with the first iron ore rail shipment on June 30, 2011, were the first iron ore shipments to leave the Schefferville area in almost 30 years.

Deep Seaport

The Port of Sept-Iles was originally developed for the initial IOC operations in the late 1940's and has continued and grown since that time. Today it exports over 30 million tonnes of iron products annually. LIM has signed a MOU with the Sept-Iles Port Authority for the use of the Pointe aux Basques terminal for handling and ship loading of LIM’s iron ore for the 2011 season and potentially beyond. LIM has also signed an agreement with a port terminal operator for the unloading, stacking and ship loading of iron ore at Pointe aux Basques. LIM will have exclusive use of the Pointe aux Basques terminal for iron ore shipments.