Toronto, Ontario-based iron ore producer Labrador Iron Mines Holdings Limited (LIM) announced Wednesday its Q3 and 9-month period (ending December 31, 2011) results and its 2012 production outlook. LIM reported a loss of C$1.7 million during Q3 fiscal 2011 compared to a net loss of C$1.3 million during Q3 of fiscal 2010. During the 9-month period ending December 31, 2011, LIM reported a net loss of C$13.3 million compared to C$3.4 million during the same time period in 2010. These losses can be attributed to higher transportation start-up costs and an increase in depreciation due to an increase in property, plant and equipment in use.
The outlook for 2012 is that mining will continue at both the James North and James South deposits with a plan to mine between 2.5 and 3.0 million tons of iron ore. It is also expected that between 1.8 and 2.0 million tons of iron ore--including material from stockpiles--will be treated in 2012 and expected to yield up to 1.5 million tons of saleable product. Procurement and construction is well advanced for the Phase 3 expansion of the Silver Yards processing plant to increase its production capacity to about 2 million tons per year.
Additionally, LIM announced Tuesday that it has entered a sales agreement with the Iron Ore Company of Canada (IOC). This agreement will allow IOC the sale of all of LIM's iron ore production for 2012.Under the 2012 confidential sales contract with IOC, the iron ore will be sold by IOC's marketing organization on the spot market for delivery to Asian markets. LIM's iron ore sales agreement with IOC enables utilization of Cape size ships-which currently has lower freight rates than the alternative Panamax vessels.