LIM Reports Positive Drill Results on its Howse Deposit in JV with Tata Steel Minerals Canada | Planning Underway for Howse Initial Production in 2016

Press Release

Toronto, Ontario, September 18, 2014. Labrador Iron Mines Holdings Limited (“LIM” or the “Company”) (TSX: LIM) reports positive drill results from its $5 million exploration program on the Howse Deposit, held in joint venture with Tata Steel Minerals Canada (“TSMC”) (LIM 49% / TSMC 51%). LIM is also pleased to provide an update on development and planning in support of initial production at Howse in 2016.

LIM’s $5.0 million Howse exploration program, which commenced in late 2013, comprised of 19 drill holes: six diamond and 13 reverse circulation (“RC”) holes totalling 2,014 metres (“m”). Of the 19 holes drilled, 17 holes returned ore-type intersections, with consistent results over the entire area drilled. Of note, hole HW-DD14-05 returned 84.1 m grading 65.9% iron (“Fe”) and HW-DD13-01A returned 79.5 m grading 64.52% Fe (cut-off grade of 58.0% Fe), demonstrating significant widths of high-grade direct shipping hematite mineralization.

Following the suspension of the exploration program in the winter, a second exploration program commenced in the summer of 2014 in order to maximize the collection of technical data under the current budget. A further 3,500 m of diamond and RC drilling is currently underway. LIM’s remaining financial commitment of $1.8 million for the 2014 Howse exploration program is fully funded.

The objective of the exploration program is to carry out infill drilling to define its first NI 43-101 compliant resource and to collect metallurgical, geotechnical, hydrogeological, and hydrology information in support of a Preliminary Economic Assessment (“PEA”). The PEA is scheduled for completion by early 2015, leading to the completion of a Feasibility Study later in 2015.

An environmental assessment process is also advancing in 2014 and 2015, designed to support a production decision. Project Registration Notices were submitted to the provincial and federal governments earlier in the year. The federal government has referred the Howse Project for Environmental Assessment and Environmental Impact Statement (EIS) Guidelines were issued in June 2014.

TSMC, the operator, is targeting a 3 million tonne per year direct shipping iron ore operation with development of an open pit and initial production anticipated in 2016 followed by full commercial production in 2017.

Under the terms of the joint venture agreement, TSMC acquired an initial 51% participating interest in the Howse Property for a total cash payment to LIM of $30 million.

Following completion of LIM’s $5.0 million exploration program, TSMC shall contribute the next $23.5 million to the Joint Venture and thereby increase its participating interest in the Howse Deposit to 70%, following which the Howse Property will be held 70% by TSMC and 30% by LIM, with each party contributing and participating pro rata.

The Howse Deposit is located in Labrador, about 25 kilometres north of LIM’s James Mine and Silver Yards processing facility and adjacent to TSMC’s Timmins Area mines and processing plant (see Figure 1). The Howse Deposit has a historical resource of 28 million tonnes at a grade of 58% Fe (natural basis). Historical resources, which were estimated by the Iron Ore Company of Canada, are not compliant with NI 43-101 and have not been verified by a Qualified Person and the historical resource estimates should not be relied upon.

About Labrador Iron Mines Holdings Limited (LIM)

Labrador Iron Mines (LIM) is a leader in the reactivation of the iron ore industry in the Schefferville/Menihek region, engaged in the mining, exploration and development of its portfolio of 20 direct shipping (DSO) deposits located in the prolific Labrador Trough. Production commenced at the James Mine and Silver Yards plant in 2011 and through to the end of its third operating year, the Company sold approximately 3.6 million dry tonnes (3.8 million wet tonnes) in 23 shipments of iron ore into the Chinese spot market.

LIM has not recommenced mining operations for the 2014 operating season due to a combination of the prevailing low price of iron ore in 2014, an assessment of the current economics of its Stage 1 deposits and a strategic shift in corporate focus towards establishing a lower cost operating framework, while concurrently negotiating the commercial terms of major contracts. The Company’s focus for 2014 is on advancing the development of the flagship Houston Project and seeking additional working capital and capital investment.

For further information, please visit LIM’s website at www.labradorironmines.ca or contact:

John F. Kearney
Chairman and Chief Executive Officer
Tel: (647) 728-4105

Rodney Cooper
President and Chief Operating Officer
Tel: (647) 729-1287

Keren Yun
Vice President, Investor Relations and Communications
Tel: (647) 725-0795

Read More: http://www.labradorironmines.ca/pdf/09-18-2014-LIM-2013-Howse-Exploration-Program.pdf

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