Initial Public Offering increased to aggregate gross proceeds of $52.8 million

    Over-allotment option exercised


    TORONTO, Jan. 2 /CNW/ - Labrador Iron Mines Holdings Limited (the
"Company") (TSX:LIR) is pleased to announce that Canaccord Capital
Corporation, the agent in the Company's recently completed Initial Public
Offering, has exercised in full its over-allotment option to offer for sale an
additional 1,720,950 units of the Company for gross proceeds of $6,883,800.
    As part of the Initial Public Offering, which closed December 3, 2007,
the Company had granted Canaccord Capital Corporation an over-allotment
option, exercisable for a period of 30 days following the closing of the
offering, to offer for sale up to an additional 15% of the number of units
issued pursuant to the offering at a price of $4.00 per unit.
    The offering consisted of 11,473,000 units at an issue price of $4.00 per
unit. Exercise of the over-allotment option has increased the size of the
Initial Public Offering to 13,193,950 units raising total gross proceeds of
$52,775,800. Each unit consists of one common share and one-half of one common
share purchase warrant, each whole warrant exercisable to purchase one
additional common share at a price of $5.00 per share at any time prior to 24
months from the closing of the offering. The closing of the over-allotment
option is anticipated to take place on January 8, 2008.
    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",

    About Labrador Iron Mines Holdings Limited

    The Company was established with the primary business objective 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, Québec.
    Following the exercise of the over-allotment option, the Company will
have 37,193,951 common shares, and 6,596,975 share purchase warrants, 857,606
broker warrants and 2,950,000 director and employee stock options outstanding.

    Cautionary Notes:

    The securities described herein have not been and will not be registered
under the United States Securities Act of 1933, as amended, or the securities
laws of any state and may not be offered or sold in the United States absent
an exemption from registration.

    The Toronto Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this press release.

    This press release contains "forward-looking information" within the
meaning of applicable Canadian securities legislation.

For further information:

For further information: John F. Kearney, Chairman and CEO, T: (416)
362-6686; Bill Hooley, President and COO, T: (011) 44 778 557 2517; Terence
McKillen, Vice President, T: (416) 362-8243

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Labrador Iron Mines Holdings Limited

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