Labrador Iron Mines Holdings Ltd. · OTC:LBRMF

Labrador Iron Mines — Investor Presentation (November 2012)

43 slides from Labrador Iron Mines's investor presentation, November 2012

  1. Slide 1: Labrador Iron Mines: Canada's New Iron Ore Producer

    Labrador Iron Mines: Canada’s New Iron Ore Producer Staying the Course November 2012

  2. Slide 2: Forward Looking Information

    Forward Looking Information Labrador Iron Mines Holdings Limited (“LIM”) has prepared this presentation for information purposes only. The information contained herein was prepared by management on a best efforts basis and is believed to be accurate. It contains forward- looking statements about the

  3. Slide 3: LIM Advantages

    LIM Advantages Canada’s newest and only independently-owned iron ore producer Current sustainable production of 2.0 million tonnes per year of iron ore Flexible production growth: ability to double current production Superior leverage to the recovery in iron ore spot price NI 43-101 Resource 45 MM t

  4. Slide 4: LIM Fast Track to Production

    LIM Fast Track to Production Advanced From Construction to Sustainable Production in Only 10 Months  Dec 2007: Closed IPO  2008 – 2010: Two year environmental 2012  First full season and permitting 2011 at James Mine 2010  Commercial 2009 production 2008 achieved 2007  2010 – 2011: Mine and pla

  5. Slide 5: LIM's First Two Years of Production

    LIM’s First Two Years of Production Valuable experience and market insight 2011 2012E1 386,000 1.6 million Sales dry tonnes dry tonnes 600,000 1.6 million Rail wet tonnes wet tonnes Shipments 3 shipments 10 shipments3  Strengthened relationships with key stakeholders Full-scale operations experienc

  6. Slide 6: LIM Portfolio: DSO Deposits (100% owned)

    LIM Portfolio: 20 DSO Deposits (100% owned) 45 Mt Current production Stage 1: James + 57 Fe% Murdoch NI 43-101 M&I surrounding deposits: Resources1 Eclipse 21.7 Mt Resource 1 Future production 121 Mt Kivivic Stage 2: Houston 22.9 Mt Resource (future production) 1 57 Fe% Historic Resources2 Howse Jam

  7. Slide 7: LIM Today

    Image: James Mine LIM Today Labrador Iron Mines – TSX: LIM

  8. Slide 8: LIM Stage 1

    LIM Stage 1 James + Surrounding Deposits near Silver Yards plants  5 smaller satellite deposits within ~15 km radius of James / Silver Yards Quebec  21 Mt NI 43-101 Resources  5 Mt historical resources  ~10 Mt stockpiles (historical) » Crushed and >50% Fe Labrador » Potential to convert to resou

  9. Slide 9: LIM James Mine

    LIM James Mine First Full Season of production James  Excellent operating results achieved in 2012 mine  Mined 962,000 tonnes at 60.8% Fe in Q2, 40%+ increase in tonnes mined from Q1  James Mine performed at planned operating rate of 28,000 tpd (ore + waste), prior to September decision to scale

  10. Slide 10: LIM Processing

    LIM Processing Silver Yards Processing Plants Dry processing Wet processing Ore processed by Ore beneficiated by crushing and crushing, washing screening and screening  Starting in late August, dry process  Winterized in August utilized exclusively to produce lump  Phase 3 construction largely co

  11. Slide 11: Sharp Decline in Quarterly Iron Ore Prices

    Sharp Decline in Quarterly Iron Ore Prices  Iron ore spot prices decreased Iron Ore Spot Price 62% Fe CFR China 33% during the quarter (US$/tonne) $140  Sharp decline in August saw Down 33% $130 prices below US$90/tonne in the quarter $120 (62% Fe CFR China basis) $110  In August, LIM sold 3 ship

  12. Slide 12: LIM's Decisive Response to Market Conditions

    LIM’s Decisive Response to Market Conditions1 Cost  Focus on cost reduction and cash conservation measures 1 Reduction  Utilize new dry classifying system to produce lump and sinter  Scale back production: revised 2012 production target of 2 Production 1.6 million dry tonnes (1.7 million wet tonn

  13. Slide 13: LIM's Enhancement Plans

    LIM’s Enhancement Plans Opportunities to improve margins immediately 1 Process  Utilize new lower cost dry classifying system Lump and 2 Sinter  Produce lump and sinter exclusively Rail & 3 Port  Rail and port efficiencies to support higher volumes Developments will further reduce costs over the

  14. Slide 14: LIM 2012 YTD Highlights

    LIM 2012 YTD Highlights On track to sell 1.6 dry million tonnes of iron ore in 2012, a 4X increase over 2011  Achieved commercial production and demonstrated LIM’s mine-to-port operational ability  Consistently achieved mining rate of 28,000 tpd (ore + waste) at the James Mine  Operations: Instal

  15. Slide 15: Iron Ore Signs of Recovery

    Iron Ore Signs of Recovery  Continues to improve Iron Ore Spot Price 62% Fe CFR China Spot 1 to US$120/tonne by (US$/tonne) Price mid-November $125 $120  Replenishing of inventory $115 Steel by Chinese steel mills 2 $110 Demand Spot price  Global crude steel demand $105 to $120/t to increase 4.5%

  16. Slide 16: LIM Superior Leverage to Iron Ore Prices

    LIM Superior Leverage to Iron Ore Prices Historical Iron Ore Recovery1 LIM’s Share Price Leverage to Iron Ore Market1 China Import Iron Ore Fines 62% Fe Spot Price - (CFR Tianjin Port) - US$/tonne $250 $16 151% Increase 20x Increase March ‘09 – Feb ‘11 Period High = C$14.32/share $14 Period High = U

  17. Slide 17: LIM Stage 2: Houston Flagship Deposit

    LIM Stage 2: Houston Flagship Deposit Potential to more than double current production Large resource  Key Development Project 23 million tonnes M+I @57.2% Fe1 15+ year mine-life + 3.7 tonnes Inf @56.5% Fe1 (NI 43-101) ~2.0 mt potential annual » More than double the historical resource2 production

  18. Slide 18: LIM Stage 2: Houston Flagship Deposit

    LIM Stage 2: Houston Flagship Deposit Simple Development Plan  New dedicated rail siding (6km) Stage 2 Deposits M&I (South Central) (000t)  Access road (10km) + bridge Houston (NI 43- 22,900 101 Compliant)  In-pit crushing and screening Malcolm (Historical) 2,900 (Phase 1)  Commencement of full

  19. Slide 19: First Nations, Rail, Sales and Port Agreements

    First Nations, Rail, Sales and Port Agreements Labrador Iron Mines – TSX: LIM

  20. Slide 20: LIM Agreements with First Nations

    LIM Agreements with First Nations Social licence to operate Agreements with First Nations  Local employment July 2008 Innu Nation of Labrador (left)  Training programs Sep 2010 Naskapi Nation of Kawawachikamach (2nd from left)  Business opportunities Innu Matimekush-Lac John June 2011 (2nd from r

  21. Slide 21: LIM Rail Agreements

    LIM Rail Agreements Near and Long-term Strategies  Rail agreements in place » G&W leases locomotive and operates LIM’s 6 km spur line » TSH Rail to Emeril Junction in Labrador: 235 km » QNS&L Railway to Port of Sept-Îles: 360 km » Lengthened two train sets Rail Strategies in place Short- term (incr

  22. Slide 22: LIM 2012 IOC Sales Agreement

    LIM 2012 IOC Sales Agreement Near-Term Strategy  Renewed 2011 agreement with Iron Ore Company of 2012 Canada (“IOC”; majority owned by Rio Tinto): Ore sale agreement » 100% of 2012 production sold to IOC  Use of ore handling facilities at Port of Sept-Îles LIM + IOC  Access to cape size ocean ves

  23. Slide 23: LIM Shipping Advantage

    LIM Shipping Advantage Deep sea port on  Atlantic seaboard » Access to European, Asian and North American markets Shipping advantage to  North American and European markets » Shorter distance relative to other primary iron ore regions Western Europe (Rotterdam) 5,000 km Eastern Europe (Constantza)

  24. Slide 24: LIM Recent Developments

    LIM Recent Developments Enhancing long-term port access Estimated $220 million New multi-user CAPEX berth Expected completion: March 31, 2014 Dredging commenced for new multi-user deep water dock 5 million tonne capacity reserved LIM would benefit from first-mover advantage as only current producer;

  25. Slide 25: LIM Recent Developments

    LIM Recent Developments Enhanced long-term port access CN Feasibility Study Proposed new CN Railway to serve Iron Ore Companies in Labrador (final route selection by Dec 2012 to support EIS submission in Feb 2013) Potential multi-user rail terminal at Port of Sept-Îles Map source: Canadian Environme

  26. Slide 26: Growth through Exploration

    Growth through Exploration Labrador Iron Mines – TSX: LIM

  27. Slide 27: Proven Track Record of Resource Conversion

    Growth through Exploration Proven Track Record of Resource Conversion More than doubled resources (historical to NI 43-101) Current 45 million NI 43-101 resources 3 Includes James, Redmond, Knob Lake, Denault and Houston Deposits 27 1 NI 43-101 compliant resource as at 2 Historical resource identifi

  28. Slide 28: 2012 Exploration Program

    Growth through Exploration 2012 Exploration Program  2012 exploration program expected to achieve 14,000 m of drilling (10,000 m plan), despite reducing budget to $5.3 million  Drill programs on Houston (remains open), Malcolm (remains open), James North, James South extension (remains open) and s

  29. Slide 29: Delivering Results

    Delivering Results Labrador Iron Mines – TSX: LIM

  30. Slide 30: LIM Guidance & Outlook

    LIM Guidance & Outlook1 Operations: concluding successful 2012 operating season, despite challenging market conditions 2012 Iron Ore Sales: 10 shipments totalling 1.6 million dry tonnes anticipated Exploration: Successful 2012 field program; new / updated resource estimates Current Sustainable Produ

  31. Slide 31: LIM Opportunity

    LIM Opportunity Superior Leverage to a Recovery in Iron Ore Prices Canada’s newest and only independently- owned iron ore producer Current sustainable production of 2.0 million tonnes per year of iron ore Operational expertise with strong government and strategic relationships Flexible production gr

  32. Slide 32: Appendix

    Appendix Labrador Iron Mines – TSX: LIM

  33. Slide 33: LIM Capital Structure

    LIM Capital Structure Simple Capital Structure With No Debt1,2 Analyst Coverage TSX Symbol LIM Canaccord Genuity Gary Lampard Credit Suisse Nathan Littlewood Share Price 3 $0.66 Desjardins Securities Jackie Przybylowski Share Price (52 week range) 3 $0.66 - $6.75 Fraser Mackenzie Wojtek Nowak Issued

  34. Slide 34: LIM Executive Team

    LIM Executive Team John Kearney Mining executive with over 40 years of industry experience; Chairman and CEO of numerous mining companies Chairman & CEO Rod Cooper Over 30 years of experience in resource industry; previously held positions as VP and Senior Analyst, Mining, with President & COO Dunde

  35. Slide 35: LIM Board of Directors

    LIM Board of Directors John Kearney Mining executive with over 40 years of industry experience; Chairman & CEO Chairman and CEO of numerous mining companies. Bill Hooley Professional mining engineer with 40 years experience. Vice Chairman CEO of Anglesey Mining plc and former President & COO of LIM.

  36. Slide 36: Most Prolific Iron Ore Region in Canada

    Most Prolific Iron Ore Region in Canada LIM’s Assets Located in the Labrador Trough Near Schefferville  Canada’s foremost iron ore producing region » 99% of Canada’s current production Labrador Iron Mines » In continuous production since 1954 » Existing rail and port infrastructure » Politically st

  37. Slide 37: LIM Property Map

    LIM Property Map Eclipse (northwest – not shown on map) North Zone 20 DSO Deposits Trough 1 44.6 Mt Central Zones 57 Fe% Wollett North Central NI 43-101 M&I Resources1 Fleming 9 Lance Ridge South Central From five DSO deposits (James, Redmond, Denault, Knob Lake and Houston) 121.3 Mt 57 Fe% Historic

  38. Slide 38: LIM Q2 Financial Results

    LIM Q2 Financial Results ($ millions, except per share data) Three months ended September 30, 2012 Net income (loss) $ (31.7) per share (0.47) Depreciation and Depletion (14.4) Cash and cash equivalents (unrestricted) 0.9 Accounts receivable and prepaids 34.5 Inventory 21.4 Total assets 359.4  Proc

  39. Slide 39: LIM H2-2012 Operating Results

    LIM H2-2012 Operating Results Quarter Ended Six Months Ended September 30, 2012 September 30, 20121 (all tonnes are dry metric tonnes) Tonnes Grade (% Fe) Tonnes Grade (% Fe) Total Ore Mined 961,700 60.8 1,629,900 61.5 Direct Rail Ore portion 569,800 62.4 1,053,200 62.5 Waste Mined 1,533,200 — 2,902

  40. Slide 40: LIM Resources

    LIM Resources1,2 (Refer to Technical Reports on SEDAR) Stage 1 and 2 Deposits Stage 3 Deposits- North Central Stage 1A and 1B Deposits Indicated (000t) Stage 3 (000t) NI 43-101 Compliant Historical (Non NI 43-101 Compliant) James (Central) 6,700 Howse 28,200 Redmond (Central) 2,900 Barney 6,300 Dena

  41. Slide 41: Product Mix & Specifications

    Product Mix & Specifications Run-of-mine ore: Lump: – Size fraction -6” (150 mm) – Size fraction -32 mm, +6 mm Product Mix Product Mix Element Content % Element Content % Current < 40% Current ~ 10% Fe 62 – 64% Fe 61 – 63% SiO2 5 – 7% Future n/a SiO2 5 – 8% Future ~10% Sinter Fines: Ultra Fines: – S

  42. Slide 42: LIM Process Flowsheet

    LIM Process Flowsheet Labrador Iron Mines – TSX: LIM 42

  43. Slide 43: Canada's New Iron Ore Producer

    Canada’s New Iron Ore Producer Main Office John F. Kearney Investor Relations Contact 220 Bay Street, Suite 700 Chairman and CEO Keren Yun Toronto, ON, M5J 2W4 VP, Investor Relations & Communications Tel: (647) 728-4125 Rod Cooper Fax: (416) 368-5344 President and COO www.labradorironmines.ca Labrad

Labrador Iron Mines Holdings — Investor Presentation (November 2012) on 6ix