Labrador Iron Mines Holdings Ltd. · OTC:LBRMF
Labrador Iron Mines — Investor Presentation (April 2013)
39 slides from Labrador Iron Mines's investor presentation, April 2013
Slide 1: Canada's newest iron ore producer
LABRADOR Canada’s IRON MINES newest iron ore producer April 2013 Investor Presentation
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
Slide 3: Canada's Newest Iron Ore Producer
Canada’s Newest Iron Ore Producer LIM Advantages The Labrador Trough: Canada’s foremost iron ore producing region We’re currently one of only four iron ore producers in Canada We’re the only independently-owned iron ore producer in Canada Our projects are close to extensive & existing infrastructure
Slide 4: We're in Production
We’re in Production Sales Rail Shipments Aerial view of Silver Yards (foreground) and James mine (background) (dry tonnes) (wet tonnes) sold 1.6 1.6 10 2011 vs. 2012 2011 Increase in 2012 tonnes sold Increase in 0.6 tonnes railed 3 0.39 Increase in shipments sold 2013 Targeting 1.7 to 2.0 million to
Slide 5: One of Four Producers in the Labrador Trough
One of Four Producers in the Labrador Trough Producers Mine Ownership 59% Iron Ore Company – Labrador City of Canada – Carol Lake 26% 15% – QCM (Mont Wright) 15% interest in ArcelorMittal + Fire Lake) Mines Canada1 – Wabush Wuhan Iron & Steel 25% interest in Bloom Lake – Bloom Lake (WISCO) Labrador
Slide 6: Mine-to-Port Solution
Mine-to-Port Solution Mine and Process Rail Port and Sales – James + surrounding deposits – LIM spur line, TSH, QNS&L – Ore unloading facilities – Sinter and lump products – Railcar maintenance facility – Access to cape-size vessels – IOC sales arrangement 6
Slide 7: Iron Ore Sold on Spot Market
Iron Ore Sold on Spot Market 2011 & 2012 Shipments totalling ~2 million tonnes sold to Chinese steel mills/customers Repeat customers Iron Ore Company of Canada Sales Agreements (IOC) 100% production sold to IOC in 2011 and 2012 Product re-sold in China based on spot, less ocean freight and IOC part
Slide 8: LIM's Shipping Advantage
LIM’s Shipping Advantage Deep sea port on Atlantic seaboard » Access to markets: Europe, Asia and North America Shipping advantage to markets in North America and Europe » Shorter distance relative to other primary iron ore regions Current access to key Asian markets Western Europe (Rotterdam)
Slide 9: LIM's Portfolio
LIM’s Portfolio Eclipse (northwest – not shown on map) North Zone DSO (Stage 5) Deposits Trough 1 44.6 mt 57 Fe% Wollett Central Zone (Stages 1, 2, 3) North Central (Stage 3) NI 43-101 Resources1 Fleming 9 Lance Ridge South Central (Stage 2) From 5 DSO deposits (James, Redmond, Denault, Knob Lake an
Slide 10: Sustainable production + flexible growth
Sustainable production + flexible growth 6 Mining in Stages Up to 5.0 million tonnes (mt) Current Production 5 (Stage 1) Flexible Production Growth 4 Stage 1: Current Production Profile ~2.0 mtpa 3 Growth Objective 2 ~2.0 Up to 5.0 mtpa 1 Ability to more 0 than double current Current Future producti
Slide 11: With access to extensive infrastructure
With access to extensive infrastructure Direct rail link to port LIM process plants Roads, airstrip, town Hydro power Direct rail access to Port Town of Schefferville with airstrip LIM Process Plants Road access Access to power 11
Slide 12: Strategic Relationship Established
Strategic Relationship Established Framework arrangement with Tata Steel Minerals Canada (TSMC) Multi-part cooperation agreements in areas of: Logistics Significant cost synergies; key logistics + infrastructure issues Rebuilding of rail line: Timmins plant to Silver Yards; Property camp accommodati
Slide 13: LIM's Operations
Canada’s newest iron ore producer LIM’s Operations
Slide 14: LIM Stage 1
LIM Stage 1 Goal: 10 mt saleable iron ore 5 Years of ~2.0 mtpa iron ore production from1: 21 mt NI 43-101 resources2 5 mt historical resources3 ~10 mt stockpiles 5 smaller satellite deposits + stockpiles within (historical)3 ~15 km radius of James / Silver Yards – Crushed, >50% Fe Stage 1B Historica
Slide 15: James Mine
James Mine Excellent 2012 results: Sales of 1.6 mt (dry); $72/t operating cost to port1 » 1.83 mt mined @ 61.3% » Consistently achieved planned operating rate of 28,000 tpd (ore + waste) 1 April 2013: Commenced 3rd Season of Operations » Forecasting sales of 1.7 – 2 million tonnes; $65 – $70/t opera
Slide 16: Silver Yards Processing
Silver Yards Processing Dry process Wet process Ore processed by crushing and screening Ore beneficiated by crushing, washing and screening Installed new dry process stream in 2012 Phase 1 + 2 commissioned; Phase 3 commissioning in 2013: expected Used exclusively in Q3: 183,000 tonnes to increase re
Slide 17: Cash Operating Cost and Strategy
Cash Operating Cost and Strategy Current Longer-term target Mining, processing, transportation $65 – $70 and site expenses Ocean freight additional per tonne per tonne (and no IOC participation fee) Cash cost reported as Developments to further reduce costs over long-term1 per tonne sold, unlo
Slide 18: Stage 2 Houston Flagship Deposit
Stage 2 Houston Flagship Deposit Targetting 15+ year mine-life with potential ~2.0 mtpa Potential to more than double current production; potential year-round operation Goal: establish long-term relationships with steelmakers NI 43-101 Resource: Stage 2: Houston Deposits 23 million tonnes M+I @ 57.2
Slide 19: Stage 2 Houston Flagship Deposit
Stage 2 Houston Flagship Deposit Proposed Houston Development Simple Development Plan Received surface and mining leases and construction permit haul road Phase 1 Development Phase 2 (Year 3) $57 million (Year 1 – $37M and Year 2 – $20M) Addition of wet Access road (10km) + bridge (permits r
Slide 20: Stage 2 Houston Flagship Deposit
Stage 2 Houston Flagship Deposit Next Steps Advancing the planning, engineering and design in 2013 Receipt of remaining permits (rail siding) Potential strategic partnerships, credit facilities, and/or off- take agreements Potential Upside Houston Deposit remains New / updated open along str
Slide 21: Stage 3 Howse Deposit
Stage 3 Howse Deposit TSMC 51% ownership of Howse; $30 million cash injection to LIM to fund 2013 working capital, capex and exploration. Significant cost savings using TSMC’s Timmins plant (LIM plant relocation not required) Potential to develop Howse several years sooner at higher production rate
Slide 22: Rail Operations
Rail Operations Life-of-Mine Rail Agreements in Place GWRR leases locomotives and (Genesee & Wyoming) operates LIM’s 6 km spur line TSH Railway to Emeril Junction in Labrador: ~200 km QNS&L to Port of Sept-Îles: ~360 km Final loaded iron ore train in 2012 (November) Ore unloaded at Port Current » Fo
Slide 23: Enhancing Long-term Port Access
Enhancing Long-term Port Access Participant in new multi-user berth at Port of Sept-Îles: 5 mt capacity reserved LIM would benefit from first-mover advantage as only current producer Two installments of $6.4M (July ‘12 & ‘13) Artist rendering: new multi-user dock at Port of Sept-Iles Good progress:
Slide 24: Agreements with First Nations
Agreements with First Nations Impact and Benefit Agreements Social License to Operate July 2008 Innu Nation of Labrador (left) Naskapi Nation of Local employment September 2010 Kawawachikamach (2nd from left) Training programs June 2011 Innu Matimekush-Lac John (2nd from right) Business opportunitie
Slide 25: Growth through Exploration
Growth through Exploration Largest drill program completed in 2012 14,000 m of drilling: 40% more than 10,000 m plan despite reducing budget to $7 million (from $8.6 million) Drill programs on Houston (remains open), Malcolm (remains open), James and historic stockpiles for: » Further technical info
Slide 26: Current Strong Recovery in Iron Ore Prices
Current Strong Recovery in Iron Ore Prices $180 Iron Ore Spot Price 62% Fe CFR China (US$/tonne) 52-week high: $160 $159/tonne 33% $140 in the quarter $120 52-week $100 low: sharp decline to Up 70% below since $80 $90/tonne Sept low $60 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12
Slide 27: Guidance + Outlook
Guidance + Outlook 2013E Production: 1.7 million – 2 million tonnes Stage 1: Current sustainable production of ~2.0 mtpa for 5 years Sales arrangement: Currently in advanced discussions with IOC Financing: working capital/off-take/other to fund various 2013 expenditures 2013 process plant enhancemen
Slide 28: Appendix
Canada’s newest iron ore producer Appendix
Slide 29: LIM Capital Structure
LIM Capital Structure Simple Capital Structure with No Debt1,2 13 Analysts $1.70 Coverage Buy Share Structure (+1 future) avg TP TSX Symbol LIM Gary Lampard Share Price 3 $0.66 Jackie Przybylowski Share Price (52 week range) 3 $0.56 - $4.86 Wojtek Nowak Issued and Outstanding 3 126.2 million Colin H
Slide 30: LIM Advantage: We're in the Labrador Trough
LIM Advantage: We're in the Labrador Trough Labrador Trough: Most Prolific Iron Ore Region in Canada Canada’s foremost iron ore producing region » 99% of Canada’s current production Labrador Iron Mines » In continuous production since 1954 » Existing rail and port infrastructure » Politically stab
Slide 31: Track record + experience
Track record + experience James Mine Fleet Proven Track Proven Management: Proven Experience: Record: Mining + technical Two operating seasons Rapid road to expertise successfully completed production Strengthened key 2007 – 2011 Baffinland Iron Mines stakeholder relationships Dec 2007: Closed IPO
Slide 32: LIM Executive Team
LIM Executive Team John Kearney Mining executive with over 40 years of industry experience; Chairman and CEO of numerous mining Chairman & CEO companies Rod Cooper Over 30 years of experience in resource industry; previously held positions as VP and Senior Analyst, President & COO Mining, with Dunde
Slide 33: LIM Board of Directors
LIM Board of Directors John Kearney Mining executive with over 40 years of industry experience; Chairman & CEO Chairman and CEO of numerous mining companies. Bill Hooley Professional mining engineer with 40 years experience. Vice Chairman CEO of Anglesey Mining plc and former President & COO of LIM.
Slide 34: LIM Q3 & 9M Financial Results
LIM Q3 & 9M Financial Results Three Months Nine Months ($ millions, except per share data) Ended Dec 31 ‘12 Ended Dec 31 ‘12 Net income (loss) $ (16.1) $ (58.4) per share (0.19) (0.79) Depreciation and Depletion (5.1) (29.3) At December 31, 2012 Cash and cash equivalents (unrestricted) $ 10.2 Accoun
Slide 35: LIM 9M 2012 Operating Results
LIM 9M 2012 Operating Results Quarter Ended Nine Months Ended December 31, 2012 December 31, 20121 (all tonnes are dry metric tonnes) Tonnes Grade (% Fe) Tonnes Grade (% Fe) Total Ore Mined 198,500 59.9 1,828,400 61.3 Waste Mined 224,500 — 3,127,100 — Ore Processed and Screened 183,600 59.8 954,800
Slide 36: 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
Slide 37: Product Mix & Specifications
Product Mix & Specifications Sinter Fines: Lump: – Size fraction -6 mm – Size fraction -32 mm, +6 mm Product Mix Product Mix Element Content % Element Content % Fe 63 – 65% Previous ~ 40% Previous ~ 10% Fe 61 – 63% Current Current SiO2 4 – 6% >80% SiO2 5 – 8% Plan <20% Plan ~62% Fe saleable produc
Slide 38: LIM Process Flowsheet
LIM Process Flowsheet Labrador Iron Mines – TSX: LIM 38
Slide 39: Contact
LABRADOR Canada’s IRON MINES newest iron ore producer John F. Kearney Chairman and CEO Rod Cooper President and COO Investor Relations Contact Keren Yun VP, Investor Relations & Communications Main Office 220 Bay Street, Suite 700 Toronto, ON, M5J 2W4 Tel: (647) 728-4125 Fax: (416) 368-5344 www.labr
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