Labrador Iron Mines Holdings Limited
TSX : LIM

Labrador Iron Mines Holdings Limited

September 06, 2011 06:00 ET

LIM Reports Production Update; Second Iron Ore Train Operating

TORONTO, ONTARIO--(Marketwire - Sept. 6, 2011) - Labrador Iron Mines Holdings Limited (TSX:LIM) reports that it has commenced the operation of a second train moving iron ore from its James Mine and Silver Yards processing plant in western Labrador to the Port of Sept-Iles, Quebec. Total ore mined from start up to August 31, amounted to 478,000 tonnes, together with 986,000 tonnes of waste. There are now approximately 100,000 tonnes of iron ore, at a grade of about 65.0% Fe, stockpiled at the port awaiting shipment.

Second Train in Operation

LIM commenced the operation of a second train on Saturday September 3. This second train will permit the rapid acceleration of the tonnage of iron ore moving to the port for sale. Improvements to the cycle times of trains from mine to port and back are also being made and this will further increase the tonnages expected to be railed.

The second train commenced operations a little earlier than previously expected following accelerated modifications to the Company's railcars. At present 270 cars are now in operation in the Sept-Iles-Silver Yards system and a further 40 should become available within the next two weeks., The accelerated release of rail cars may allow the introduction of a third but shorter train before the end of September to further increase railed tonnages to port.

Production Update

Ore mined in August totalled 176,000 tonnes, made up of 40,000 tonnes of direct railing ore at 65.3% Fe and 136,000 tonnes of plant feed at 58.1% Fe. Total ore mined from start up to the end of August amounts to 478,000 tonnes, together with 986,000 tonnes of waste. The mining extraction rate has been expanded in recent weeks with the introduction of larger machinery, and is now running in excess of 25,000 tonnes per day, including direct railing ore, plant feed and lower grade ore, together with waste.

Stockpiles of run-of-mine ore at Silver Yards at the end of August total 148,000 tonnes, including 84,000 tonnes of direct railing ore at 65.3% Fe, 52,000 tonnes of plant feed material at 60.3% Fe and 12,000 tonnes of lower grade ore at 52.5% Fe which will be stockpiled for treatment in 2012 when the Phase II upgrade and expansion of the Silver Yards processing plant is commissioned.

A total of 55,000 tonnes of direct railing ore at 65.3% Fe was railed to the port during the month of August. Together with material railed during prior months, there are now approximately 100,000 tonnes at 65.0% Fe stockpiled at the port awaiting shipment.

The Silver Yards processing plant treated 135,000 tonnes during the month at an average grade of 58.1% Fe producing 15,500 tonnes of lump ore at 62.5% Fe and 51,750 tonnes of sinter fines at 64.7% Fe. Total ore treated to August 31, was 233,000 tonnes at 58.1% Fe yielding 25,000 tonnes of lump ore at 63.5% Fe and 85,000 tonnes of sinter fines at 64.9% Fe. All of this plant production is now stockpiled at Silver Yards awaiting railing to port and subsequent sale.

The plant throughput rate has been increased and the processing plant is now treating in excess of 7,000 tonnes per day towards the target 10,000 tonnes per day. Recovery of iron units is increasing as fines handling improves and this improvement is expected to continue when Phase II of the plant, specifically designed for fines, is commissioned during September.

Iron Ore Sales

Under the iron ore sale agreement with the Iron Ore Company of Canada ("IOC") shipping arrangements for the ocean transport are now being finalized and it is expected that the first Cape-size vessel filled with LIM direct railing ore will depart Sept-Iles during the middle of September.

Qualified Person

Information of a scientific or technical nature contained in this release has been prepared by or under the supervision of D.W. Hooley, President of the Corporation and a Qualified Person within the meaning of National Instrument 43-101 of the Canadian Securities Administrators.

About Labrador Iron Mines Holdings Limited (LIM)

LIM's Schefferville Projects involve the development of twenty direct shipping iron ore deposits in western Labrador and north-eastern Quebec near Schefferville, Quebec. The properties are part of the historic Schefferville area iron ore district where mining of adjacent deposits was previously carried out by the Iron Ore Company of Canada from 1954 to 1982.

Labrador Iron Mines contemplates mining in stages. The first phase of Stage 1 comprises the James Mine and the Silver Yard processing plant which is connected by a rail spur to the main Schefferville to Sept-Iles railway.

Full scale mining and processing operations commenced in June 2011 and the first train departed LIM's Silver Yards for Sept-Iles on June 29, 2011. To the end of August, about 100,000 tonnes of direct railing iron ore had been delivered to the Port of Sept-Iles where it is stockpiled awaiting shipment.

For further information, please view the Company's website at www.labradorironmines.ca.

Cautionary Statements:

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 iron ore and steel, general market conditions, the uncertainty of future profitability and access to additional capital, risks inherent in mineral exploration and risks associated with development, construction and mining operations, delays in obtaining or failures to reach agreements with any potentially impacted aboriginal groups or to obtain required governmental, environmental or other project approvals. There can be no assurance that the Company will be successful in reaching any agreement with any First Nations groups who may assert aboriginal rights or may have a claim which affects the Company's properties or may be impacted by the Schefferville Area project. Caution should be exercised on placing undue reliance on forward looking information.

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