Labrador Iron Mines (LIM) and Tata Steel Minerals Canada have formed a joint venture to explore and develop LIM’s Howse iron-ore deposit in the Schefferville region of the Labrador Trough. The deposit is located about 25 km north of LIM’s currently producing James mine and Silver Yards processing facility and adjacent to Tata’s Timmins Area mines and processing plant.
Tata Steel Minerals Canada will be the initial operator of the joint venture. The company is owned 80% by Tata Steel Ltd. and 20% by New Millennium Iron Corp. Under the terms of the agreement, Howse Minerals Ltd., a wholly owned subsidiary of Tata Steel Minerals Canada, has acquired an initial 51% participating interest in the Howse property for a total cash consideration of $30 million.
The Howse deposit has a historical resource of 28 million mt at a grade of 58% iron. As part of the joint venture, LIM is conducting a $5 million exploration program on the deposit. The program includes 70 holes and up to 10,000 m of drilling.
A feasibility study is planned for completion by July 2014, with a target of starting mine development in 2015 and commercial production in 2016.
LIM is Canada’s newest iron-ore producer, with a portfolio of direct-shipping-ore operations and projects on Labrador Trough. Initial production began at the James mine in June 2011. Now in its third year of operations, LIM is targeting the sale of 1.7 million mt of iron-ore products in 2013.