- Year End Financial Results reported
- Schefferville Project Moving Forward
TORONTO, July 2 /CNW/ - Labrador Iron Mines Holdings Limited (TSX: LIR)
announces that it has filed its Audited Consolidated Financial Statements and
Management's Discussion and Analysis for the year ended March 31, 2008, which
may be inspected under the Company's profile at www.sedar.com or on the
Company's website at www.labradorironmines.ca
For the period from May 17, 2007 to March 31, 2008 the Company reported a
net income of $1,992,961, the main components of which were interest income of
$603,272 and a future income tax recovery of $3,696,767, offset in part by
stock-based compensation expense of $1,750,130.
Interest income of $603,272 arose from the investment of the net cash
proceeds of the Company's Initial Public Offering which raised gross proceeds
of $52.6 million. The future income tax recovery arose due to a reduction in
tax rates expected to be in effect at the time that temporary differences
between the purchase price and the underlying income tax values of mineral
property interests acquired are expected to reverse.
During the period from December 3, 2007 to March 31, 2008 the Company
invested $1,596,416 (including $1,050,000 in stock-based compensation on
options granted to exploration and operating employees) on its mineral
properties, the principal components of which were geology, environmental,
permitting and community consultation.
At March 31, 2008 the Company had $47.6 million in cash and current
Schefferville Project Moving Forward
Labrador Iron Mines is focused on the development of direct shipping iron
ore in the Labrador Trough, in the Province of Newfoundland and Labrador, near
Schefferville, Quebec (the "Schefferville Project").
Following the IPO, the Company commenced plans to complete a program of
verification drilling and bulk sampling on certain of the properties and the
calculation of a compliant mineral resource, leading to the undertaking of a
detailed engineering study of mining these hematite deposits to produce
"direct shipping" lump and sinter fine ore, which will require minimal
processing, for sale to European and Far Eastern steelmakers.
During the ensuing months, the Company expanded its management and
operating team with a number of senior appointments, initiated further
activities to advance the developmental stages of the Project and awarded
various contracts, including environmental baseline studies, detailed
exploration drilling, bulk sampling, resource estimation, metallurgical
process testing, rail and port studies and engineering design, all directed to
move the Schefferville Project forward towards initial production targeted for
SNC-Lavalin, in conjunction with Geostat and with participation by the
Labrador Innu Development Limited Partnership, has been awarded a contract for
a Resource and Engineering Study, including detailed engineering design and
specifications for major items of plant and infrastructure. This will include
metallurgical test-work aimed at the design of a process circuit required to
meet market specifications for the particular types of iron ore.
A major reverse circulation drilling contract has been let to Cabo
Drilling Corp. to provide data for a compliant resource estimate on the
various deposits, including a reserve estimate on the Phase One Properties,
and to assist with both short term mine planning and with longer term
operational planning. It is expected that this program will start in July 2008
and will be supplemented by an exploration trenching program.
RSM Mining Services Inc. from Labrador City has commenced a summer
program to excavate an 8,000 tonnes ore bulk sample from the Phase One
deposits closest to Schefferville and to treat this material by crushing,
screening and washing to replicate the expected final product. Some of this
material will be used in the metallurgical testing program and the remainder
will be available for bulk samples and market testing by potential iron ore
The Company has submitted the Project Registration Application for the
first phase of development of the Schefferville Project to the Department of
Environment and Conservation in the Province of Newfoundland and Labrador and
to the Canadian Environmental Assessment Agency (CEAA). The Project
Registration Documentation addresses production from the first phase of the
Schefferville Project, being the James North, James South and Redmond
properties. The development plan calls for the initial production of about
500,000 tonnes of iron ore in 2009 and building up to three million tonnes in
The Company has entered into a Memorandum of Understanding with the
Labrador Innu Association, representing the Sheshatshiu Innu First Nation and
the Mushuau Innu First Nation, respectively, living in the communities of
Sheshatshiu and Natuashish, Labrador reflecting the agreement of the parties
with respect to community support for the development of the Schefferville
Project and their joint commitment to negotiate and enter into a more detailed
impact and benefits agreement.
The Company plans the commencement of commercial production of iron ore
from the deposits located on the Schefferville Property at the earliest
opportunity and, subject to receipt of permits, is working to bring Phase One
of the Project into production in 2009.
Terence N. McKillen, M.Sc., P. Geo., Vice President and a Director of the
Company is the Company's Qualified Person under Canadian National Instrument
43-101 and has reviewed this press release.
Third Quarter Financial Statements Amended
The Company has also refiled its interim financial statements and MD&A
for the quarter ended December 31, 2007 which have been amended to reflect the
change in tax rates which came into effect in December 2007, which change
resulted in a Future Income Tax Recovery being recorded in that quarter, and
to change the accounting for the costs of the Initial Public Offering and
stock-based compensation charges.
About Labrador Iron Mines Holdings Limited
Labrador Iron Mines Holdings Limited was established to explore and
develop "direct shipping" iron ore deposits on properties in which it holds
interests located in the Labrador Trough, in the province of Newfoundland and
Labrador, near Schefferville, Quebec. The Company was listed on the TSX in
December 2007, following a successful IPO in which it raised over $52 million.
The Company's properties in Labrador are part of the historic
Schefferville iron ore district from which over 150 million tons of direct
shipping iron ore was previously mined by the Iron Ore Company of Canada from
1954 to 1982. Labrador Iron Mines is targeting to commence production of both
lump and sinter fine iron ore in 2009.
The common shares and warrants of Labrador Iron Mines Holdings Limited
are listed on the Toronto Stock Exchange under the symbols "LIR" and "LIR.WT",
Some of the statements contained herein may be forward-looking statements
which involve known and unknown risks and uncertainties. Without limitation,
statements regarding potential mineralization and resources, exploration
results, and future plans and objectives of the Company are forward looking
statements that involve various degrees of risk. The following are important
factors that could cause the Company's actual results to differ materially
from those expressed or implied by such forward looking statements: changes in
the world wide price of mineral commodities, general market conditions, risks
inherent in mineral exploration, risks associated with development,
construction and mining operations, the uncertainty of future profitability
and the uncertainty of access to additional capital.
For further information:
For further information: Company Contacts: John F. Kearney, Chairman and
CEO, T: (416) 362-6686; Bill Hooley, President and COO, T: (011) 44 778 557
2517; Terence McKillen, Executive Vice President, T: (416) 362-8243