Labrador Iron Mines Announces New Mineral Resource Estimates for Houston and Knob Lake Deposits
Drill programs continue to convert historical resources to current NI 43-101 resources
(firmenpresse) - TORONTO, ONTARIO -- (Marketwire) -- 05/31/12 -- Labrador Iron Mines Holdings Limited ("LIM" or the "Company") (TSX: LIM) is pleased to report that its 2011 drilling programs continued to increase the size of the Houston deposits and that a new National Instrument (NI) 43-101 mineral resource estimate has been calculated for the Knob Lake deposit, both located in western Labrador.
In its 2011 exploration programs, LIM completed 8,216 metres (m) of reverse circulation (RC) drilling in 139 holes drilled on its projects in Labrador and 2,794 m of RC drilling in 51 holes drilled on properties in Quebec.
Houston deposits increased in size
LIM is pleased to report that an updated independent mineral resource estimate of the Houston deposits has confirmed the Measured and Indicated resource estimate of 23 million tonnes at a grade of 57.2% iron (Fe), compared to 22 million tonnes at a grade of 57.3% Fe previously reported and has increased the Inferred resource to 3.7 million tonnes at a grade of 56.5% Fe from the 690,000 tonnes at a grade of 54.9% Fe previously reported. The Houston deposits remain open along strike, particularly to the southeast, and further drilling is planned for 2012 to test for possible extensions and to upgrade the Inferred resource. Descriptions of Iron Ore Company of Canada (IOC) ore type classification are found in the Appendix.
A summary of the new resource estimate, compared to that previously reported by the Company in March 2011, (Technical Report Houston Property SGS Canada Inc., (SGS) March 25, 2011) is shown in the table below. The same methodology was used in each case. The detailed resource estimate is shown in the Appendix to this release.
Commenting on the new resource estimate at the Houston deposits, John F. Kearney, LIM's Chairman and CEO said, "It is particularly encouraging that this independent review has confirmed a larger resource at Houston, which is becoming LIM's major project for the next five years. The increase in tonnage was more significant in the Inferred category and further drilling is planned this year to upgrade and further expand the Houston resource."
New Knob Lake mineral resources estimate of 5.7 million tonnes
LIM is also pleased to report a new mineral resource estimate for its Knob Lake deposit of 5.7 million tonnes at an average grade of 54.2% Fe in the Measured and Indicated categories, which is a significant increase over the previous historical IOC estimate of 4.0 million tonnes at an average grade of 48.4% Fe in the Inferred category.
Descriptions of IOC ore type classification are found in the Appendix. The historical resources referred to in this press release are based on work completed and estimates prepared by IOC prior to 1983 and were not prepared in accordance with NI 43-101. The Company is not treating any historical resource estimate as a defined current resource verified by a Qualified Person and the historical resource estimates should not be relied upon. However, the historical resource estimates are still considered relevant.
The Knob Lake deposit is located about 3 kilometres ("km") from LIM's Silver Yards process plant and, subject to permitting, may be included in Stage 1 of LIM's direct shipping (DSO) iron ore operations at a later date.
The new estimate, independently prepared by SGS in accordance with NI 43-101, shows a total Measured and Indicated mineral resource of 5.72 million tonnes at an average grade of 54.2% Fe and 8% silica (SiO2) and represents an increase in tonnage of 42% relative to the historical resource (non NI 43-101 compliant) previously estimated by the IOC prior to 1982. The new mineral resource includes extensions outlined during LIM's 2010 and 2011 exploration programs and also includes manganiferous iron-bearing mineral resources with manganese (Mn) grades of greater than 3.5% totalling 899,000 tonnes (at) 51.4% Fe, 6.8% Mn in the Measured and Indicated categories. Descriptions of IOC ore type classification are found in the Appendix.
The historical resources referred to in this press release are based on work completed and estimates prepared by IOC prior to 1983 and were not prepared in accordance with NI 43-101. The Company is not treating any historical resource estimate as a defined current resource verified by a Qualified Person and the historical resource estimates should not be relied upon. However, the historical resource estimates are still considered relevant.
The independent reviews of the Houston and Knob Lake deposits were carried out by Maxime Dupere, P. Geo of SGS who is a Qualified Person and independent of LIM within the meaning of NI 43-101 - Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators. The SGS Technical Reports for the Houston and Knob Lake deposits will be filed on SEDAR () within 45 days.
The mineral resource estimate for the Knob Lake deposit was completed using a 3D modeling and block model interpolation methodology. A total of 79 historical (IOC) RC drill holes, 19 RC holes (LIM), 28 trenches (LIM), one diamond drill hole, 1204 assays and 689 composites were used for the resource estimation. The interpolation was done by ordinary kriging. The block model covers a maximum strike length of 585 m, a width of up to 250 m with a maximum depth of 135 m below surface. The block model was defined by block sizes of 5x5x5 m with an orientation of 314.4 degrees ( degrees ). The mineralized solid provided by LIM was validated and modified to meet the estimation and interpretation parameters of SGS. The density was defined using the equation stated hereafter: ((Fe)x0.0258) +2.338)x0.9. A set of 689 (3 m) composites were used all within the Knob Lake mineralized solid. No capping was used. A variogram according to the KL1 composites was built for the elements Fe, Mn, and phosphorus (P), as well as silica (SiO2) and alumina (Al2O3). Classification was done using the kriging error on Fe.
Commenting on the new mineral resource estimates, Rod Cooper, LIM's President and Chief Operating Officer said, "Our exploration programs continue to confirm not only the reliability of the historical resource estimates but have also identified previously unknown mineralization that has significantly increased the total resources at the various deposits."
A summary comparison of the new Knob Lake mineral resource estimate with historical IOC resources is shown in the Table below and a summarized compilation is listed in the Appendix.
2011 Exploration Work Programs:
In its 2011 exploration programs, LIM completed 8,216 m of RC drilling in 139 holes drilled in its projects in Labrador and 2,794 m of RC drilling in 51 holes drilled in properties in Quebec.
The table below summarizes where the drilling was carried out in Labrador.
The main objectives of the 2011 exploration programs carried out on LIM's properties in Labrador were to expand the Houston resource to support its development as LIM's next Stage 2 project and to test a number of the smaller deposits (Central Zone - Knob Lake 1, Ruth Lake 8, Gill Mine) all located in the vicinity of the James Mine which, in the future, could be developed as satellite feeder deposits to LIM's existing Silver Yards processing facility.
At Houston, the objectives were to test the area between Houston 1 and 2, test the down dip extension of the known iron enrichment along the eastern margin of Houston 1 and also complete a bulk sampling program of 360 tonnes extracted from the Houston 1 and 2 deposits to test the amenability of the Houston ore to upgrading.
First phase drill programs were completed at the Ruth Lake 8 and Gill Mine areas. At the small Ruth Lake 8 area, located about one km from the Silver Yards plant, the drilling was successful in determining the general location of the historical resource (410,000 tonnes at an average grade of 53.4% Fe (not NI 43-101 compliant)). The historical resources referred to in this press release are based on work completed and estimates prepared by IOC prior to 1983 and were not prepared in accordance with NI 43-101. The Company is not treating any historical resource estimate as a defined current resource verified by a Qualified Person and the historical resource estimates should not be relied upon. However, the historical resource estimates are still considered relevant. Further work is planned to confirm this resource and to target additional iron-enriched areas 600 m to the north, which are not listed as historical resources but appear on resource maps.
In the Gill Mine area, drilling has confirmed the general location of the historical resources (4.6 million tonnes at an average grade of 50.5% Fe (not NI 43-101 compliant)) towards the north and central areas. Drilling towards the south end of Gill was halted at the end of the season in December but is planned to be continued in 2012. LIM is planning further drilling in 2012 to be able to compile a NI 43-101 compliant mineral resource estimate in 2012.
Three holes were drilled to test for extensions of mineralization south of LIM's James Mine. Further drilling is planned in 2012 to define this potential.
Four holes were drilled on the Redmond 2B area to test for iron enrichment between Redmond 2 and 2B areas and for northwest extensions.
The table below summarizes the portion of the program completed in Quebec.
The main objectives of the 2011 exploration programs on LIM's properties in Quebec, held through its wholly-owned subsidiary Schefferville Mines Inc., were to carry out further drilling in the Denault 1, 2 and 3 areas, initiate a first phase program on Star Creek 1 and conduct a regional exploration program in and around the Malcolm 1 area.
The Denault property consists of three separate areas of iron enrichment. The first area, Denault 1, is approximately 6.5 km northwest of the town of Schefferville. The second area, Denault 2, is approximately 500 m to the southeast from Denault 1 and the third area, referred to as Denault 3, is located 800 m southeast of Denault 2.
In March 2011, LIM reported a non-independent NI 43-101 mineral resource estimate for Denault 1 of 6.4 million tonnes at an average grade of 54.8% Fe and 8% SiO2. (Technical Report and Resource Estimate, Denault Property, T.N. McKillen March 11, 2011).
During 2011, LIM drilled an additional ten holes (618 m) on Denault 1 and carried out a further 444 m of drilling in sixteen holes on Denault 2 and 3, which were not included in the March 2011 mineral resource estimate.
LIM drilled 350 m in seven holes on the Star Creek Property. Star Creek 1 was mined by IOC during the 1970s when the ore produced was marketed for its manganese content. The remaining historical resource (IOC, 1982) reported for Star Creek 1 is 1.5 million tonnes grading 50.96% Fe and 7.26% SiO2 (natural analysis) (not NI 43-101 compliant). The historical manganese resource is reported as 2 million tonnes grading 45.9% Fe, 6.2% SiO2 and 6.54% Mn (natural analysis).
The historical resources referred to in this press release are based on work completed and estimates prepared by IOC prior to 1983 and were not prepared in accordance with NI 43-101. The Company is not treating any historical resource estimate as a defined current resource verified by a Qualified Person and the historical resource estimates should not be relied upon. However, the historical resource estimates are still considered relevant.
The 2011 drilling represented the first drilling program carried out by LIM on the Star Creek 1 property. Further work is planned to allow the full delineation of the Fe/Mn enrichment and its inclusion into NI 43-101 compliant mineral resource estimation.
Malcolm 1
The Malcolm 1 area lies in Quebec, approximately 12 km southeast of the town of Schefferville and was mapped and drilled by IOC in several phases between the 1950s and 1980. The historical 1982 (non NI 43-101 compliant) mineral resource listed by IOC is 2.9 million tonnes grading 56.2% Fe and 6.14% SiO2(natural analysis). A manganese resource is given as 422,000 tonnes grading 51.4% Fe, 4.93% SiO2 and 5.80% Mn (natural analysis).
LIM's 2011 program at Malcolm 1 represents the initial work carried out by LIM on this property. Fourteen out of the first series of eighteen holes on Malcolm 1 returned ore-type intersections. The table below summarizes the intercepts of those fourteen holes. True thickness (ETT) is estimated using an average bedding dip of 45 degrees and vertical drilling dips for every RC hole.
An interesting feature observed in the drilling to date is that the Malcolm 1 mineralization appears to be mainly hard blue hematite with a large proportion of lump iron ore. Malcolm 1 will be the main focus of LIM's 2012 drilling program.
2012 Exploration Programs
Following on the success of the 2011 exploration programs, a 2012 budget of approximately CAD$8 million has been set to support LIM's aggressive drilling efforts planned for the summer of 2012. Drill programs, principally at Houston 1, 2 and 3 and Malcolm 1, as well as a number of other deposits, will focus on generating further mineral resources and technical information required for detailed mine planning.
In addition to this drilling, a resource definition and bulk sampling program of historic stockpiles adjacent to former producing mine will be initiated with a view to providing supplemental plant feed to the Silver Yards processing plant. Exploration work aimed at evaluating historical manganese resources will also be carried out along with metallurgical testing with a view to ascertaining compatibility with the Silver Yards' processing plant flow sheet.
In a new initiative to the main focus on DSO iron ore, LIM plans an initial core drill program on recently identified taconite iron mineralization on LIM's mineral claims, which will be supported by geophysical programs. The Schefferville/Menihek area has a number of taconite deposits being explored/developed by other companies and these deposits, which usually average about 30% Fe, can often show very significant tonnages.
Qualified Person
This release has been prepared under the supervision of Terence N. McKillen, Executive Vice President and a Director of the Company and a Qualified Person within the meaning of NI 43-101. The current resource estimates disclosed herein have been prepared by Maxime Dupere, P. Geo of SGS Canada Inc. who is an Independent Qualified Person within the meaning of NI 43-101.
Analyses
Analyses for all of the samples from the 2011 drilling programs were carried out by Activation Laboratories (Actlabs). The analytical method used was borate fusion whole rock X-Ray Fluorescence.
Quality Control
From the beginning of the 2008 RC drilling & trenching campaign, LIM initiated a quality assurance and quality control protocol. The procedure includes the systematic addition of in-house blanks, in-house reference standards, field duplicates, and preparation laboratory duplicates to approximately each 25 batch samples sent for analysis at Actlabs.
Historical Resources
The historical resources referred to in this press release are based on work completed and estimates prepared by IOC prior to 1983 and were not prepared in accordance with NI 43-101. The Company is not treating any historical resource estimate as a defined current resource verified by a Qualified Person and the historical resource estimates should not be relied upon. However, the historical resource estimates are still considered relevant.
About Labrador Iron Mines Holdings Limited (LIM)
Labrador Iron Mines (LIM) is Canada's newest iron ore producer. We own a portfolio of direct shipping (DSO) iron ore operations and projects located in the prolific Labrador Trough. Initial production commenced at our 100%-owned James Mine in June 2011 and we recorded the sale of 400,000 tonnes of iron ore in our first start-up season. The first full production season commenced on April 2, 2012, with a sales target of 2 million tonnes of iron ore for the 2012 year.
LIM is focused on a strategic and robust growth plan arising from our portfolio of 20 iron ore deposits in Labrador and Quebec, all within 50 kilometres of the town of Schefferville. The James Mine is connected by a direct rail link to the Port of Sept-Iles, Quebec. The area also benefits from established infrastructure including the town, airport hydro power and railway service. Starting with the James Mine and leading to the development of the expanding Houston flagship project, our objective is to provide shareholders with long-term value as we ramp up production and sales towards 5 million tonnes per year by 2015.
We are currently the only independently-owned Canadian iron ore producer listed on the Toronto Stock Exchange and trade under the symbol LIM.
For further information, please visit LIM's website at .
Cautionary Statements:
Appendix
Compiled Houston Resource Estimation as at March 31, 2012 (NI 43-101)
Detailed Houston Resource Estimation as at March 31, 2012 (NI 43-101)
Compiled Knob Lake Resource Estimation as at March 31, 2012 (NI 43-101)
IOC ore type classification.
Contacts:
Labrador Iron Mines Holdings Limited
Rodney Cooper
President & Chief Operating Officer
(647) 729-1287
Labrador Iron Mines Holdings Limited
Keren Yun
Vice President, Investor Relations & Communications
(647) 725-0795
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Datum: 31.05.2012 - 13:00 Uhr
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