TORONTO, Feb. 17 /CNW/ - Labrador Iron Mines Holdings Limited (TSX: LIR)
announces that it has filed its unaudited Financial Statements and MD&A for
the third quarter and nine months ended December 31, 2008. The reports are
available under the Company's profile at www.sedar.com or on the Company's
website at www.labradorironmines.ca.
Cash and cash equivalents at December 31, 2008 stand at $37.7 million.
The Company has no borrowings or debt and remains in excellent financial
condition to initiate production from the Phase One deposits of its
Schefferville Area direct shipping iron ore project. Start-up of initial
production is targeted for the summer of 2009 subject to final project
approvals and timely receipt of operating permits and licenses.
At present, the Company is in the development stage and does not generate
income except for interest income on its cash balances. For the three and nine
month periods ended December 31, 2008, the Company reported a net loss of
$682,489 ($0.02 per share) and $1,279,715 (0.04 per share) respectively, the
main components being stock-based compensation expense of $498,562 and
$1,085,125 respectively. Corporate expenses and administration costs for the
quarter totaling $417,124 and $854,100 for the nine months were partially
offset by interest income of $262,785 and $971,943 respectively from cash
investments in highly liquid GICs with major Canadian financial institutions.
During the quarter, the Company invested $3.9 million in its mineral
properties and $10.2 million in the nine months ended December 31, 2008, the
principal components of which were drilling, bulk-sampling, engineering,
metallurgical testwork, environmental, permitting and community consultation.
In the summer of 2008, a 4,500 metre reverse circulation and core drilling
program was completed to provide data towards a compliant resource estimate on
the Phase One deposits and to assist with mine and operational planning. This
was supplemented by an exploration trenching program and detailed
hydro-geological drilling of over 1,000 metres in 18 holes along with
associated pump testing. Samples were sent to SGS-Lakefield for assay and
results are being incorporated into the resource estimates.
In addition, test mining of 6,500 tonnes of bulk ore samples from the
Phase One deposits was successfully carried out by RSM Mining of Labrador
City. The material was crushed and screened and washed offsite to replicate
the production process and produce samples of lump ore and sinter fines. No
problems in mining or processing were encountered and metallurgical testwork
indicated that the ore is readily amenable to simple washing and screening
with a low level of impurities. Some of the product was transported by rail to
the Port of Sept Iles, which was the first iron ore to be shipped from the
Schefferville area since the shut down of the previous operations by IOC in
Outlook for 2009
The Company submitted an Environmental Impact Statement (EIS) to the
Minister of Environment and Conservation of Newfoundland and Labrador in
December 2008 in accordance with the final guidelines received and following
extensive environmental studies and public consultation in Labrador and
Schefferville. Upon receipt of project approval, anticipated in the first
quarter of 2009, the Company plans to submit applications for the necessary
operating permits and licences to initiate mining. This will allow for modest
production in 2009 concurrent with the testing of all operational and
transport facilities in advance of commercial production in 2010.
The Company has signed MOUs with the Port Authority of Sept-Iles and
stevedoring contractors for the use of the Authority's wharves for storage and
ship-loading of its products and plans to finalize commercial transportation
arrangements with the rail carriers.
In the first quarter of 2009, the Company expects to receive the resource
and engineering study being prepared by SNC-Lavalin in conjunction with
Geostat International Inc. and Labrador Innu Development Corporation for the
design of the process circuit to enhance the grade of the lump ore and sinter
Discussions have begun with a number of steel mills, particularly in
Europe, that have indicated encouraging interest in the Company's lump ore and
sinter fines products and are currently conducting test work on the sample
products. The high iron grades and low level of impurities achieved through
the washing and screening process make the products desirable for end users.
The Company's production targets and hence sales for 2009 are planned to be
Benchmark iron ore pricing negotiations between the major iron ore
suppliers and consuming countries for 2009 contract prices are expected to be
concluded during the first half of 2009. The Company's future sales pricing
will largely be based on these benchmark prices. As a result of the downturn
in the steel industry it is almost certain that there will be some reduction
in prices from the 2008 levels. The extent of such reductions is still being
negotiated between major suppliers and steel mills but forecasters are
predicting this is likely to be at least 20% and perhaps more. Beyond 2009 the
future of iron ore pricing will be dependent on the rate of recovery of
world-wide economies and especially on Chinese demand. The Company has a view
that there will be some recovery in iron ore prices in 2010, over the reduced
prices expected for 2009, and the Company is consequently targeting 2010 as
its first year of significant commercial production.
Terence N. McKillen, M.Sc., P. Geo., Executive Vice President and a
Director of the Company is the Company's Qualified Person under Canadian NI
43-101 and has reviewed this press release.
About Labrador Iron Mines Holdings Limited
Labrador Iron Mines holds interests in over 5,300 hectares of direct
shipping iron ore deposits in the Labrador Trough in the Province of
Newfoundland and Labrador, near Schefferville, Quebec. The Company's
properties in Labrador form 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 the start of production of both lump ore and sinter
fines in 2009.
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: please view the Company's website at
www.labradorironmines.ca or contact: Donna Yoshimatsu, Vice-President,
Investor Relations, Tel: (647) 728-4119, E-mail: