Houston 43101 - 20100518

LABRADORIRONMINESLIMITED
ScheffervilleProject
RESOURCEESTIMATE&TECHNICALREPORT ONTHEHOUSTONIRONOREDEPOSIT WESTERNLABRADOR PROVINCEOFNEWFOUNDLANDANDLABRADOR CANADA
Preparedby T.N.McKillen,B.A.(Mod),M.A.,M.Sc.,P.Geo. May18,2010
LabradorIronMinesLimited ResourceEstimate&TechnicalReportontheHoustonIronOreDeposit
CONTENTS
1. Summary(Item3)..............................................................................................................................1 1.1 PropertyDescriptionandLocation.........................................................................................................1 1.2 History....................................................................................................................................................................1 1.3 Geology...................................................................................................................................................................2 1.4 Exploration...........................................................................................................................................................3 1.5 DrillingandSampling.....................................................................................................................................3 1.6 SamplePreparation,SecurityandDataVerification......................................................................3 1.7 MetallurgicalTesting.......................................................................................................................................4 1.8 MineralResourcesandMineralReserves............................................................................................4 1.9 BlockModeling...................................................................................................................................................6 1.10 Analyses.................................................................................................................................................................6 1.11 Density....................................................................................................................................................................6 1.12 OtherRelevantDataandInformation....................................................................................................6 1.13 Conclusions..........................................................................................................................................................7 1.14 Recommendations............................................................................................................................................8 Introduction(Item4)........................................................................................................................9 RelianceonOtherExperts(Item5)...........................................................................................10 PropertyDescriptionandLocation(Item6)...........................................................................11 Accessibility,Climate,LocalResources,Infrastructure,Physiography(Item7)..........15 5.1 Accessibility......................................................................................................................................................15 5.2 Climate.................................................................................................................................................................15 5.3 LocalResources..............................................................................................................................................15 5.4 Infrastructure...................................................................................................................................................15 5.4.1TheRailroad...........................................................................................................................................16 5.5 Physiography....................................................................................................................................................16 History(Item8)...............................................................................................................................18 GeologicalSetting(Item9)...........................................................................................................20 7.1 RegionalGeology............................................................................................................................................20 7.2 LocalGeology...................................................................................................................................................21 7.3 GeologyofScheffervilleArea...................................................................................................................23 DepositTypes(Item10)................................................................................................................25 8.1 IronOre...............................................................................................................................................................25 8.1.1Houston....................................................................................................................................................26 8.2 ManganeseDeposits.....................................................................................................................................26 8.2.1Houston....................................................................................................................................................27 Mineralization(Item11)...............................................................................................................28 9.1 IronOre...............................................................................................................................................................28 9.2 ManganeseOre................................................................................................................................................29
2. 3. 4. 5.
6. 7.
8.
9.
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10.
Exploration(Item12)....................................................................................................................30 10.1 PastExploration.............................................................................................................................................30 10.2 LIMExplorationfrom20052007.......................................................................................................31 10.2.1 2005Program..................................................................................................................................31 10.2.2 2006Program..................................................................................................................................31 10.2.3 2007Program..................................................................................................................................31 10.3 2008and2009Exploration......................................................................................................................32 10.3.1 2008Program..................................................................................................................................32 10.3.2 2009Program..................................................................................................................................32 Drilling(Item13)............................................................................................................................34 SamplingMethodandApproach(Item14)..............................................................................35 12.1 RCSampleSizeReduction(2008).........................................................................................................35 12.2 RotarySplitterRCSampleSizeReduction(2009)........................................................................36 12.3 2006,2008and2009TrenchSampling.............................................................................................36 SamplePreparation,AnalysisandSecurity(Item15)...........................................................37 13.1 SamplePreparationandSizeReductioninSchefferville..........................................................37 13.1.1 2008......................................................................................................................................................37 13.1.2 2009......................................................................................................................................................37 13.2 ArrangementofSamplesattheScheffervillePreparationLaboratory..............................37 13.2.1 2008and2009SamplePreparation....................................................................................37 13.2.2 Samplesizereduction.................................................................................................................38 13.3 SamplePreparationatSGSLakefieldLaboratory........................................................................39 13.4 SampleAnalysesatSGSLakefield.........................................................................................................39 13.5 SamplepreparationatACTLABS...........................................................................................................40 13.6 SampleAnalysisatACTLABS...................................................................................................................41 13.6.1 XRayFluorescenceAnalysisCode:4C...............................................................................41 13.6.2 ElementsAnalyzed........................................................................................................................41 13.6.3 Code4COxidesandDetectionLimits(%)........................................................................41 13.7 SampleSecurityandControl....................................................................................................................42 13.7.1 LIMSampleQualityAssurance,QualityControlandSecurity...............................42 13.7.2 SGSLakefieldSampleQualityAssurance,QualityControlandSecurity..........43 13.7.3 ACTLABSampleQualityAssurance,QualityControlandSecurity......................43 DataVerification(Item16)..........................................................................................................45 14.1 QAQCProceduresandProtocols............................................................................................................45 14.2 AssayCorrelationofTwinnedHoles....................................................................................................46 14.3 Blanks...................................................................................................................................................................48 AdjacentProperties(Item17).....................................................................................................49 MineralProcessingandMetallurgicalTesting(Item18)...................................................50 16.1 LakefieldResearchLaboratories...........................................................................................................50 16.2 MidrexTests.....................................................................................................................................................51 16.3 CentredeRecherchesMinrales(1990)...........................................................................................51 16.4 2006BulksamplingbyLIM......................................................................................................................52
11. 12.
13.
14.
15. 16.
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16.5 16.6 16.7 17.
SGSLakefield(2008)....................................................................................................................................53 2008BulkSamplingByLIM.....................................................................................................................54 ManganeseProperties.................................................................................................................................56
MineralResourceEstimation(Item19)...................................................................................57 17.1 Introduction......................................................................................................................................................57 17.2 DatabaseandValidation.............................................................................................................................58 17.3 GeologicalInterpretationandModeling............................................................................................59 17.4 SpecificGravity(SG).....................................................................................................................................59 17.5 Statistics..............................................................................................................................................................60 17.6 BlockModelingandGradeEstimation................................................................................................61 17.6.1 Variography......................................................................................................................................61 17.6.2 GradeEstimationMethodology..............................................................................................61 17.7 ResourceClassification...............................................................................................................................69 17.8 ResourcesValidation....................................................................................................................................70 OtherRelevantDataandInformation(Item20)....................................................................71 18.1 CommunityandSocialIssues..................................................................................................................71 18.1.1 Benefitsoftheproject.................................................................................................................71 18.2 Markets................................................................................................................................................................71 Conclusions(Item21)....................................................................................................................73 Recommendations(Item22).......................................................................................................74 References(Item23).....................................................................................................................75 DateandSignaturePage(Item24)............................................................................................77 Illustrations(Item26)...................................................................................................................80 ................................................................................................................................................85
18.
19. 20. 21. 22. 23.
AppendixI
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ListofTables Table1 Table2 Table3 Table4 Table5 Table6 Table7 Table8 Table9 Table10 Table11 Table12 Table13 Table14 Table15 Table16 Table17 Table18 Table19 Table20 Table21 Table22 Table23 Table24 Table25 Table26 HoustonDepositNI43101Compliantvs.HistoricalIronResources HoustonDepositTotalNI43101CompliantManganiferousIronResources ListofLicensesComprisingtheHoustonProject(asofMarch31,2010) ClassificationofIronOreTypes TrenchSampleResultsHouston1Deposit HoustonDrillingPrograms SGSLakefieldSamplePreparationMethodology BorateFusionWholeRockXRFReportingLimits Rock,CoreandDrillCuttingsSamplePreparationProtocolsACTLABS PulverizationContaminantsthatareAddedbyACTLABS Code4COxidesandDetectionLimits(%) SGSLakefieldLaboratoryDataApprovalSteps LakefieldWashingTestResults MidrexLumpOreSamplesAnalyses JamesBulkSampleScreenAnalysis(CRM) SawyerLakeSampleScreenandChemicalAnalysis(CRM) SummaryofTestsbySGSLakefield ResultsofMineralogicalCharacterizationTests(SGSLakefield) CalculatedGradefrom2008BulkSamples(SGSLakefield) 2008BulkSampleTestResults(SGSLakefield) SummaryofHoustondatabase Resultsofthe3Dsemivariogramanalysis Parametersoftheblockmodel Parametersofsearchellipsesusedintheinterpolationofgradesandclassification HoustonDepositNI43101Compliantvs.HistoricalIronResources HoustonDepositNI43101CompliantManganiferousIronResources
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ListofFigures Figure1 Figure2 Figure3 Figure4 Figure5 Figure6 Figure7 Figure8 Figure9 Figure10 Figure11 Figure12 Figure13 Figure14 Figure15 Figure16 Figure17 Figure18 Figure19 Figure20 ProjectLocationMap MapofLIMMiningLicenses GeologicalMapofLabrador RCSizeReductionandSamplingMethod(2008) RiffleSplittingProcedure FeAssayCorrelationbetweenOriginalandExit2DuplicateSamples SiO2AssayCorrelationbetweenOriginalandExit2DuplicateSamples GraphicofFeAssayCorrelationoftwinnedHoles GraphicSiO2AssayCorrelationoftwinnedHoles Visualcomparisonof4pairsofholes Frequency,CumulativeFrequencyandNormalDistributionchartofFe Frequency,CumulativeFrequencyandNormalDistributionchartofMn Frequency,CumulativeFrequencyandNormalDistributionchartofSiO2 Section344ofHouston1with15mcorridoronbothsides Section325ofHouston2Swith15mcorridoronbothsides Section386ofHouston3with15mcorridoronbothsides Houston1Crosssection344.InterpolatedFegrades Houston2SCrosssection325.InterpolatedFegrades Houston3Crosssection386.InterpolatedFegrades StackedlongsectionslookingtotheNEshowingblockswithFe,SiO2gradesand classification
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1. SUMMARY(ITEM3)
TheauthorofthisreportisadirectorandofficerofLabradorIronMinesHoldingsLimited (LIMHL)andofLabradorIronMinesLimited(LIM),awhollyownedsubsidiaryofLIMHLwhich holdsthemineralclaimsonwhichtheHoustonirondepositislocated.Theauthorisaqualified personwithinthemeaningofNationalInstrument43101StandardsofDisclosureforMineral ProjectsoftheCanadianSecuritiesAdministrators.TheauthorisnotindependentofeitherLIMHL orLIMasdescribedinsection1.4ofNI43101.ThisreportdescribestheHoustondepositsand makesanewresourceestimatecompliantwiththerequirementsofNationalInstrument43101.
1.1 PROPERTYDESCRIPTIONANDLOCATION
LIMholds100%titleto34MineralRightsLicensesasofthedateofthisreportissuedbythe DepartmentofNaturalResources,ProvinceofNewfoundlandandLabrador,representing395 mineralclaimslocatedinwesternLabradorcoveringapproximately9,875hectares,includingthe Houstondeposits.AlloftheLIMproperties,includingHouston,arelocatedinthewesterncentral partoftheLabradorTroughIronRangeandarelocatedabout1,140kmnortheastofMontrealand withinafewkilometresto70kmfromthetownofSchefferville(Quebec).TheHoustondepositis approximately20kmfromScheffervilleandcomprises8MineralRightsLicensesrepresenting66 mineralclaimscoveringapproximately1,650hectares. TherearenoroadsconnectingtheareatosouthernLabradororelsewhereinCanada.Accesstothe areaisbyrailfromSeptlestoSchefferville,byairfromMontrealandSeptlesviaWabush.LIMis preparingtheJamesandRedmonddepositsforproductionstartupduringthesummerof2010. TheIronOreCompanyofCanada(IOC)hadpreviousminingactivitiesclosetotheseproperties.
1.2 HISTORY
TheQuebecLabradorIronRangehasatraditionofminingsincetheearly1950sandisoneofthe largestironproducingregionsintheworld.Theformerdirectshippingironore(DSO)operations atScheffervilleoperatedbyIOCproducedinexcessof150milliontonsoflumpandsinterfineores overtheperiod19541982.ThefirstseriousexplorationintheLabradorTroughoccurredinthe late1930sandearly1940swhenHollingerNorthShoreExplorationCompanyLimited(Hollinger) andLabradorMiningandExplorationMiningCompanyLimited(LM&E)acquiredlargemineral concessionsintheQuebecandLabradorportionsoftheTrough.Miningandshippingfromthe Hollingerlandsbeganin1954underthemanagementoftheIOC,acompanyspecificallyformedto exploittheScheffervilleareairondeposits. Asthetechnologyofthesteelindustrychangedovertheensuingyearsmoreemphasiswasplaced ontheconcentratingoresoftheWabushareaandinterestandmarketsforthedirectshipping Scheffervilleoresdeclined.Finally,in1982,IOCclosedtheiroperationsintheScheffervillearea. FollowingtheclosureoftheIOCminingoperationstheminingrightsheldbyIOCinLabrador revertedtotheCrown.BetweenSeptember2003andMarch2006,FentonandGraemeScott, EnergoldMineralsInc.(Energold)andNewMillenniumCapitalCorp.(NML)beganstaking claimsoverthesoftironoresintheLabradorpartoftheScheffervillecamp.Recognizinganeedto consolidatethemineralownership,EnergoldandsubsequentlyLIM,enteredintoagreements bringingthesoutherndepositsunderoneownership.Alloftheproperties,includingHouston, comprisingLIMsScheffervilleareaprojectwerepartoftheoriginalIOCScheffervilleholdingsand
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formedpartofthe250milliontonsofreservesandresourcesidentifiedbutnotminedbyIOCinthe area.
1.3 GEOLOGY
Atleast45hematitegoethiteoredepositshavebeendiscoveredinanarea20kmwidethatextends 100kmnorthwestofAstrayLake,referredtoastheKnobLakeIronRange,whichconsistsofa tightlyfoldedandfaultedironformationexposedalongtheheightoflandthatformstheboundary betweenQuebecandLabrador.TheKnobLakepropertiesarelocatedonthewesternmarginofthe LabradorTroughadjacenttoArcheanbasementgneisses.TheCentralorKnobLakeRangesection extendsfor550kmsouthfromtheKoksoakRivertotheGrenvilleFrontlocated30kmnorthof WabushLake.Theprincipalironformationunit,theSokomanFormation,partoftheKnobLake Group,formsacontinuousstratigraphicunitthatthickensandthinsfromsubbasintosubbasin throughoutthefoldbelt. ThesedimentaryrocksintheKnobLakeRangestrikenorthwest,andtheircorrugatedsurface appearanceisduetoparallelridgesofquartziteandironformationwhichalternatewithlow valleysofshalesandslates.TheHudsonianOrogenycompressedthesedimentsintoaseriesof synclinesandanticlines,whicharecutbysteepanglereversefaultsthatdipprimarilytotheeast. Thesynclinesareoverturnedtothesouthwestwiththeeastlimitscommonlytruncatedbystrike faults.Mostofthesecondaryearthytexturedirondepositsoccurincanoeshapedsynclines,some aretabularbodiesextendingtoadepthofatleast200m,andoneortwodepositsarerelativelyflat lyingandcutbyseveralfaults.Subsequentsupergeneprocessesconvertedsomeoftheiron formationsintohighgradeores,preferentiallyinsynclinaldepressionsand/ordownfaulted blocks. TheLabradorTroughcontainsfourmaintypesofirondeposits: Softironoresformedbysupergeneleachingandenrichmentoftheweaklymetamorphosed chertyironformation;theyarecomposedmainlyoffriablefinegrainedsecondaryiron oxides(hematite,goethite,limonite); Taconites,thefinegrained,weaklymetamorphosedironformationswithaboveaverage magnetitecontentandwhicharealsocommonlycalledmagnetiteironformation; Moreintenselymetamorphosed,coarsergrainedironformations,termedmetataconites whichcontainspecularhematiteandsubordinateamountsofmagnetiteasthedominant ironminerals. MinoroccurrencesofhardhighgradehematiteoreoccursoutheastofScheffervilleat SawyerLake,AstrayLakeandinsomeoftheHoustondeposits.
Secondaryenrichmentincludedtheadditionofsecondaryironandmanganesewhichappearto havemovedinsolutionandfilledporespaceswithlimonitegoethite.Secondarymanganese minerals,i.e.,pyrolusiteandmanganite,formveinletsandvuggypockets.Thetypesofironores developedinthedepositsaredirectlyrelatedtotheoriginalmineralfacies.Thepredominantblue granularorewasformedfromtheoxidefaciesofthemiddleironformation.Theyellowishbrown ore,composedoflimonitegoethite,formedfromthecarbonatesilicatefacies,andtheredpainty hematiteoreoriginatedfrommixedfaciesintheargillaceousslatymembers.Onlythedirect shippingoreisconsideredbeneficiabletoproducelumpandsinterfeedandformspartofthe resourcesfortheLIMproject.
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1.4 EXPLORATION
MosthistoricexplorationonthepropertieswascarriedoutbyIOCuntiltheclosureoftheir operationinthe1980s.Aconsiderableamountofdatausedintheevaluationofthecurrentstatus oftheresourceandreserveevaluationisprovidedinthedocuments,sectionsandmapsproduced byIOCortheirconsultants.RecentexplorationhasbeencarriedoutbyLIMduringtheperiod2005 to2009andincludestriconereversecirculationanddiamonddrilling,trenching,bulksamplingand datacollationandverification. TheHoustondepositiscurrentlyatthemostadvancedstagenexttotheJamesandRedmond depositswhicharebeingpreparedforproductionstartupinmid2010. AdditionalRCdrillingwillberequiredtoenabletheclassificationofallofthepotentialresourcesto becompliantwithNI43101.Additionalbulksamplingformetallurgicaltestingwillbenecessaryto preparethefinalprocessflowsheetfortreatmentoftheironandmanganeserichresources.
1.5 DRILLINGANDSAMPLING
DiamonddrillingoftheScheffervilleareairondepositshasbeenaproblemhistoricallyinthatthe alternatinghardandsoftmineralizedzonestendtoprecludegoodcorerecovery.TraditionallyIOC usedacombinationofreversecirculationdrilling,diamonddrillingandtrenchingtogeneratedata forreserveandresourcecalculation.AlargenumberoforiginalIOCdatahavebeenrecovered, reviewedanddigitizedbyLIM. ForthemostrecentcalculationsoftheresourcesfortheHoustondeposit,datafrom4,418metres ofdrillingin84historicalreversecirculationdrillholesand1,485sampleshasbeenused.The systematicdrillinghasbeencarriedoutonsections100feet(30metres)apart. IOCalsosampledtargetsbytrenchingandtestpitsinadditiontodrilling.Thetestpitsandtrenches weretodeterminelithologies,orebodylimitsandqualityoforeonsurface.Atotalof200metresin 64testpitsand6,700metresin159trencheswiththeir2,086samplesfromhistoricalrecordswere consideredinthisreport.Sampleswereusuallycollectedover10feet(3.0metres)intervals. Inadditiontohistoricaldata,LIMcarriedoutseveralexplorationprogramssince2006withthe purposeofverifyingthehistoricalresources.Thisincluded4,181metresin63drillholes,554 metresin10trenchesand1,449samples.Mostofthedrillingcompletedwasusingtriconereverse circulation. ThegeologicalsectionsoriginallypreparedbyIOChavebeenupdatedwiththeinformation obtainedthroughLIMsexplorationwork. Abulksampleprogramwasstartedin2006(2,400kgfromHouston)butthemajorbulksampling wascarriedoutin2008when2,000tonnesoforewereexcavatedfromtheHouston1deposit.
1.6 SAMPLEPREPARATION,SECURITYANDDATAVERIFICATION
TheprecisesamplingproceduresusedbyIOCarenotknownbutitisbelievedthatLIMhas followedproceduresthataresimilartothoseusedbyIOCinthepast.Allsampleswereprocessedin apreparationlaboratory,locatedinScheffervillethatwasestablishedbyLIM.Samplingaswellas thepreparationwascarriedoutundersupervisionofLIMandSGSGeostatpersonnelin2008and
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byLIMpersonnelin2006and2009byexperiencedgeologistsortechniciansfollowingwell establishedsamplingandpreparationprocedures.Thesampleswerereducedtorepresentative, smallersizesamplesthatweresenttoSGSLakefieldlaboratoryortoACTLABSlaboratoryfor analysisandtesting.
1.7 METALLURGICALTESTING
Fourbulktrenchsamplesof600kgeachtakenin2006fromtheHoustondepositweretestedfor compressivestrength,crusherindexandabrasionindexatSGSLakefield.Compositecrushing,dry andwetscreenanalysis,washingandclassificationtestsweredoneatrpcTheTechnical SolutionsCentreinFredericton,NewBrunswick. Duringthe2008bulksampleprogram,atotalof2,000tonnesoforewascollectedfromthe Houstondepositfromwhich200kgrepresentativesamplesweretakenforeachoftherawore types.AtHouston,onlyblueorewascollectedandsenttoSGSLakefieldlaboratoriesfor metallurgicaltesting.Othertests(angleofrepose,bulkdensity,moisture,directheadassayand particlesizeanalysisdeterminations)werealsocarriedout.Preliminaryscrubbertestswerealso performed.ThepotentialofbeneficiationbygravitywasexploredbyHeavyLiquidSeparationand VacuumfiltrationtestworkwasalsocarriedoutbyOutotec.
1.8 MINERALRESOURCESANDMINERALRESERVES
Tables1and2summarizetheresourceestimatefortheHoustondeposit,bothironand manganiferousironresources,whichareNI43101compliant.Nomineralreservesarereportedin thisdocument.
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Table1 HoustonDepositNI43101Compliantvs.HistoricalIronResources (DirectShippingResourcesDSO) OreType Classification 43101 Historical Tonnage SG Fe% SiO2% Tonnage Fe% SiO2% NBLNB Measured Indicated Inferred HSiO2 Measured Indicated Inferred Total Measured Indicated Inferred Table2 HoustonDepositTotalNI43101CompliantManganiferousIronResources NI43101Compliant Measured(LMN+HMN) Indicated(LMN+HMN) Total [NOTE:approximately4,000tonnesofmeasuredandindicatedmanganiferousironresourceslie outsidethelimitsofclaimsheldbyLIM] IOCestimatedmineralresourcesandreserveswerepublishedintheirDirectShippingOre(DSO) ReserveBookpublishedin1983.Theestimateswerebasedongeologicalinterpretationsoncross sectionsandthecalculationsweredonemanually.IOCcategorizedtheirestimatesasreserves. Theauthorhasadoptedthesameprincipleasthe2007TechnicalReportonLIMsWestern LabradorIronDepositspreparedbySNCLavalinthattheseshouldbecategorizedatresourcesas definedbyNI43101. TheIOCclassificationreportedallresources(measured,indicatedandinferred):thetotalmineral resource.ThesehistoricalestimatesarenotcurrentanddonotmeetNI43101Definition Standardsandarereportedhereforhistoricalpurposesonly.Thehistoricalestimatesshouldnotbe reliedupon.
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6,700 3.52 5,274 3.51 1,004 3.48 1,329 3.33 1,382 3.33 494 3.32
61.12 60.40 59.17 52.64 52.71 52.55
8.58 9.61 11.43 21.33 21.08 21.19 10.69 12.00 14.65
7.13 7.13
9,114 57.43
8,029 3.49 59.71 6,656 3.47 58.80 1,498 3.43 56.99
9,114 57.43
Tonnes (x1,000) 480 351 831
Fe% 54.2 54.4 54.3
SiO2% 8.8 9.5 9.1
Mn% 5.8 5.0 5.5
LIMsresourceestimatesfortheHoustondepositof14.68milliontonnes(includingHSiO2not reportedpreviously)atagradeof59.3%ironintheMeasuredandIndicatedcategoriesrepresents anincreaseof61%overthehistoricalresourceof9.1milliontons.Afurther1.5milliontonnesof resourceshasbeenclassifiedintheInferredcategory.TheHoustondepositremainsopentothe northwestandsoutheastandtodepth.
1.9 BLOCKMODELING
LIMusedGemcomGEMS6.2.3softwarefortheresourceestimation.Theordinarykriging interpolationmethodwasusedtoestimatetheresourcesbyblockmodelingwithblocksizesof 5x5x5metresandblockrotationof45.6whichcorrespondstothegeneralstrikeofthedeposit. LIMusedthegeologicalandoremodelsinterpretedinplaneandinsections.LIMuseddifferent searchellipsesderivedfrom3Dsemivariogramanalysesfortheclassificationoftheresources.
1.10 ANALYSES
Analysesforallofthesamplesfromthe2006,2008and2009drillingandtrenchingprogramswere carriedoutbySGSLakefieldLaboratoryand/orbyActivationLaboratories.Theanalyticalmethod usedwasboratefusionwholerockXRayFluorescence.
1.11 DENSITY
Avariablespecificgravity(density)wasusedforthemodeledoretypes.LIMusedthefollowing equation:SG(insitu)=(2.3388+Fex0.0258)x0.9.TheregressionformulawascalculatedbyLIM basedupon229specificgravitytests.
1.12 OTHERRELEVANTDATAANDINFORMATION
TheKnobLakeIronRangeiswellknownforitshematitegoethiteirondepositsandthisregionwas exploitedforapproximately30yearsbyIOC. LIMproposestoreactivateDSOoperationsfromthe samegeneralarea,commencinginitiallywiththeJames,Redmond2B&5depositsand subsequently,addingtheHoustonandotherdeposits,locatedrelativelyclosetoSchefferville, beforedevelopingdepositsfurtherremovedfromexistinginfrastructure.LIMplansto systematicallybringthehistoricresourcesofthevariousprojectsintocompliancewithNI43101 onastagedbasisasrequiredforfuturedevelopment. ItisbelievedthattheDSOironoreproducedbyIOCrequiredlittleprocessingandthatonly crushingandscreeningwasperformedandthenblendingtoachievetherequiredgradeand productspecificationsbeforebeingloadedontotrainsfortransportationtoSeptles.LIMhas evaluatedwashingandscreeningoftheoretoimprovethequalityandgradeofproductsandto ensureagreaterdegreeofconsistencyintheproductionoflumporeandsinterfines.Itisexpected thattheproposedwashingandscreeningprocesswillremovelowgradeironandsilicamaterial andshouldincreasethegradesofthefinalproductbyabout1015%oftheminedgrade. TherailwayoriginallyconstructedbyIOCisstillavailableandincurrentuseforpassengersand freightfromScheffervilletoEmerilJunction(MenehekDivision)whereitinterchangeswiththe QNS&LrailwaywhichhasbeencontinuallyhaulingironoreconcentratesfromtheLabradorCity WabushareatoSeptlessincethelate1960s.Somerefurbishingofthetracks,railsandculvertson theMenehekDivisionwillbenecessarythrougharecommendedmultiyearrepairandreplacement
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program.LIMisnegotiatinganagreementwithTshiuetinRailTransport(TSH),acompanyowned bythreeQuebecFirstNationsandalsowithQuebecNorthShore&LabradorRailway(QNS&L)to reachSeptles. LIMhasbeencollectingseasonalenvironmentalbaselinedatasincemid2005.TheHouston propertyhasbeenincludedinthefirstphasestudywhichalsoincludedtheJames,Redmondand KnobLakeproperties.TheJamesandRedmondpropertieshaverecentlycompletedenvironmental assessmentandhavebeenreleasedfromanyfurtherenvironmentalassessmentbythe NewfoundlandandLabradorDepartmentofEnvironmentandConservation. LIMhasestablishedanactivecommunityrelationsprogramsincemid2005andanongoingeffort ismadetoworkverycloselywiththerelevantFirstNationstofocusondevelopingandmaintaining productiveworkingrelations,ensuringagoodunderstandingoftheproposedproject.LIMhas signedanImpactBenefitsAgreementwiththeInnuofLabradorandMemorandaofUnderstanding withothertwoFirstNationswhomayhaveaboriginalrightsinthearea.LIMiscurrentlyengaged withthoseFirstNationsinnegotiationsforEconomicDevelopmentAgreements.LIMhasalso assistedthreeQuebecbasedFirstNationstoidentifyandundertaketheworknecessarytoallowfor atimelyexpansion/upgradeoftheTSHoperationstoincludetheshipmentofironore. ThereisahighlevelofexistinginfrastructureintheScheffervilleareaasaresultoftheformerIOC operationsandthiswillbeaugmentedasLIMundertakesthestartupofinitialdevelopmentofthe JamesandRedmonddeposits. TheHoustondepositislocatedwithinreachofexistinginfrastructure,includingroadaccess, electricalpowerlinesandtherailwayterminalandproposedrailloadingyard,althoughLIM anticipatesconstructinganew10kmhaulageroadtolinktheHoustondeposittotheRedmond minesite,thuskeepingitsoperationscompletelywithintheProvinceofNewfoundlandand Labrador. Themarketforironoresandrelatedproductshasseensomesubstantialchangesinrecentyears.It isexpectedthattheEuropeanmarketisthemostlikelydestinationforproductsfromtheLIM ProjectgiventhefreightadvantageofSeptlesduetoitsproximitytoEurope.However,there remainsastrongdemandforironorefromtheFarEastandinparticularfromChina.
1.13 CONCLUSIONS
TheauthorhasreviewedallofthedatainthepossessionofLIMrelatingtotheHoustonandnearby ironandmanganesedepositsownedbyLIMandhaspersonalknowledgeoftheoverallprojectfrom initialconceptionandpropertyacquisitiondatingbackto2005.AllofLIMsexplorationwork programscarriedoutin2006through2009wereconductedunderthesupervisionoftheauthor. TechnicalreportspreparedbyLIMsseniorgeologicalstaffreportingonannualworkprograms, includingdrilling,trenchingandbulksampling,andtheblockmodelingandresourceestimationof theHoustondeposit,werecarriedoutunderthedirectsupervisionoftheauthor. ThegeologicalinterpretationoftheHoustondepositisrestrictedtothezonesconsideredof economicquality.ThehistoricalIOCparametersoftheNonBessemerandBessemeroretypeswere consideredtogetherforthegeologicalinterpretationsandmodeling.TheHighSilica(HiSiO2)ore typescontaining>50%Feandfrom18%upto30%SiO2werealsoconsideredforthegeological interpretationandmodelingoftheselectedmineraldeposits.
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ThegeologicalmodelingoftheHoustondepositwasperformedusingstandardsectionalmodeling of30metrespacing.Geologicalinterpretationandmodelingofthemineraldepositsonpaper sectionsandplansfromIOCweredigitizedandupdatedwithnewinformationacquiredduringthe recentfieldworkseasons. LIMusedGemcomGEMS6.2.3softwarefortheresourceestimation.Theordinarykriging interpolationmethodwasusedtoestimatetheresourcesbyblockmodelingwithblocksizesof 5x5x5metresandblockrotationof45.6whichcorrespondstothegeneralstrikeofthedeposit. LIMusedacompositelengthof3.0metre,consideredsuitableincomparisontothedimensionof theblocksusedforthemodel.Thesearchellipseswereobtainedfrom3Dsemivariogramanalyses fortheclassificationoftheresources.Theblockmodelestimationusedthetopographyandthe overburdencontactintheparameterssettings. TheresultsofLIMsworktodateontheHoustondeposithasshownthatthereismorethan sufficientmerittocontinueexplorationanddevelopmenttofurtherconfirm,expandandreclassify theexistingresources,especiallytothesouth,tothenorthandtoprovidefurtherdetailbetween thevariouszonesofmineralization. AconsiderableamountofinfrastructureremainsaroundScheffervilleandLIMiscurrently restoringoraddingnewfacilitiesincludingabeneficiationplantandrailcarloadingfacilityatthe SilverYard,a4.4kmrailspurlineanda70mancampatBeanLake.Suchfacilitieswouldbe availableforanyproductionfromtheHoustondeposit.
1.14 RECOMMENDATIONS
TheresultsofexplorationtodatehavebeenverypositiveandhavealreadyshownthattheIOCdata isveryreliableandhavebeenconfirmedwiththerecentexploration.Explorationcompletedonthe firstphasedepositsbelongingtoLIMinwesternLabradorincludingHouston,James,Redmond2B andRedmond5haveconfirmedandaddedtothehistoricresourcespreviouslydefinedbyIOC, bringingthemintocompliancewithNI43101. FollowingareviewofalldatarelativetotheHoustondepositandtheinterpretationand conclusionsofthisreview,thereismorethansufficientmerittocontinueexplorationtofurther expandtheresourcebaseoftheHoustondepositbystepoutandinfilldrillingtothesouthaswell asexploringinmoredetailbetweenthecurrentlydefinedzonesofmineralization.
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2. INTRODUCTION(ITEM4)
TheauthorisadirectorandseniorofficerofLabradorIronMinesHoldingsLimited(LIMHL)and adirectorandofficerofLabradorIronMinesLimited(LIM),awhollyownedsubsidiaryofLIMHL, whichholdsthemineralclaimsonwhichtheHoustonirondepositislocated.Theauthorisa qualifiedpersonwithinthemeaningofNationalInstrument43101StandardsofDisclosurefor MineralProjectsoftheCanadianSecuritiesAdministratorsbutisnotindependentoftheIssuer. PreviousresourceestimatesfortheHoustondepositwerebasedonestimatesofmadebyIOCin 1982andwereconsequentlyofanhistoricnatureandwerenotcompliantwithNI43101.The presentreportdescribestheHoustonirondepositlocatedinwesternLabradorandpresentsa resourceestimatecompliantwiththerequirementsofNI43101. TheauthorhasapersonalknowledgeoftheHoustondepositandtheothernearbyirondeposits heldbyLIMinwesternLabrador,havingbeeninstrumentalintheinitialacquisitionanddirection ofexplorationofthepropertiesdatingfrom2005.Theauthorwascoauthorofaninternalscoping studyofLIMsironoreprojectinwesternLabradorinSeptember2006. LIMengagedSNCLavalinin2007toprepareanindependentTechnicalReport(October2007)on itswesternLabradorironproperties.InMarch2010,LIMengagedtheseniorauthoroftheSNC Lavalinreport(A.Kroon)tocoauthor,withSGSCanadaInc.,aRevisedTechnicalReportonanIron OreProjectinWesternLabrador,ProvinceofNewfoundlandandLabradorandanindependent TechnicalReportofanIronProjectinNorthernQuebec. LIMhascarriedoutsignificantgeologicalexplorationprogramsontheHoustonandotherLabrador propertiesheldbyLIMduringthe2006,2008and2009summerseasons.Theauthorhasreviewed theannualtechnicalassessmentreportspreparedbyLIMforsubmissiontotheDepartmentof MinersandEnergy,NewfoundlandandLabrador. InOctober2009,LIMandNMLrationalizedcertainmineralpropertyownershipinterestsin Labrador,includingtheHoustonproperty,throughanexchangeofcertainminerallicenses.The agreementrepresentedtheexchangebyeachpartyofequalquantitiesofapproximately13million tonsofironore.Theseexchangeswerebasedonhistoricalestimatesofgrossquantitiesofironore (nonNI43101compliant)containedinvariousDSOdeposits.UndertheAgreement,NMLagreed totransfertoLIManumberofminerallicensesinLabradorandadjacentclaimblocksinQuebec, someofwhichclaimsadjoinorformpartofLIMsHoustonpropertygivingLIMownershipof100% oftheknownextentoftheHoustonirondeposit. TheauthorhasvisitedthesiteoftheHoustonprojectandthegeneralScheffervilleareairon depositsonseveraloccasions,including46May,2006,1819May,2006,17Jan,2007,7Dec.2007, 1314Mar.2008,2829Nov.2008and22Oct.2009.
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3. RELIANCE ONOTHEREXPERTS(ITEM5)
ThisreporthasbeenpreparedforLIM.Thefindings,conclusionsandrecommendationsarebased ontheauthorsinterpretationofinformationinLIMspossession,comprisingreports,sectionsand planspreparedbyIOCduring1954to1982;reportspreparedforothersubsequentownersofsome oftheLabradorareaironproperties,includingtheHoustonproperty,reportsofexplorationand samplingactivitiesofLIMduringtheperiod20062009andindependenttechnicalreports authoredbySNCLavalin,A.Kroon,SGSGeostatLtdandMRB&Associates. Theauthorhasverifiedtheownershipofthemineralclaimsbyreferencetothewebsiteofthe DepartmentofNaturalResourcesoftheprovinceofNewfoundlandandLabradorasofthedateof thisreportbutdoesnotofferanopiniontothelegalstatusofsuchclaims. TheassistanceofErickChavez,B.Sc.,M.Sc.,HowardVatcher,B.Sc.,EldonRoul,B.Sc.andTara Schrama,B.Sc.,ofLIMsExplorationDepartmentandRodelOrtiz,LIMsCADManagerinthe preparationofthisreportandtheunderlyinginhousetechnicalreportsisgratefullyacknowledged.
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4. PROPERTYDESCRIPTIONANDLOCATION(ITEM6)
TheHoustonpropertyislocatedinthewesterncentralpartoftheLabradorTroughironrangeand about1,140kmnortheastofMontrealand20kmsoutheastofthetownofSchefferville,Quebec (Figure1). TherearenoroadsconnectingthisareatosouthernLabradororelsewhereinQuebec.Accesstothe areaisbyrailfromSeptlestoScheffervilleorbyairfromMontrealandSeptles. LIMholdstitle,subjecttovariousagreementsdescribedbelow,to34MineralRightsLicensesasof thedateofthisreportissuedbytheDepartmentofNaturalResources,ProvinceofNewfoundland andLabrador,representing395mineralclaimslocatedinnorthwestLabradorcovering approximately9,875hectares(Table3). UnderthetermsofanOptionandJointVentureAgreementdatedSeptember15,2005between FonteneauResourcesLimited(Fonteneau)andEnergoldandassubsequentlyamendedon propertiesinLabrador,suchagreementwhichwassubsequentlyassignedtoLIM,aroyaltyinthe amount3%ofthesellingpriceFOBportpertonneofironoreproducedandshippedfromanyof thepropertiesshallbepayabletoFonteneau.ThisroyaltywillbecappedatUS$1.50pertonneon theHoustonproperty. OnOctober22,2009,LIMannouncedthatithasenteredintoanagreementwithNMLtoexchange certainoftheirrespectiveminerallicencesinLabrador.Theexchangeeliminatesthefragmentation oftheownershipofcertainminingrightsintheScheffervilleareaandwillenablebothpartiesto separatelymineandoptimisetheirrespectiveDSOdepositsinasefficientamanneraspossible. AspartoftheAgreement,NMLhastransferredtoLIM125hectaresinfiveminerallicensesin LabradorthatadjoinorformpartofLIMsHoustondeposit. UndertheAgreementthepartieshaveagreedtoworkcollaborativelytofacilitatetheirrespective extraction,processingandtransportationactivitiesbyenablingeachpartytoapplyforallrequired surfacerights.Thepartieshavealsoagreedtofinalizethelayoutordetailedtechnicaldescriptions ofthesurfacerightsthateachrequirestoaccesstheDSOdepositsontheirrespectivemineral claims,includinganynecessaryroads,raillines,processingandstorageareas.
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Table3 ListofLicensesComprisingtheHoustonProject (asofMarch31,2010) Claims Area(Has) Issued LicenseNumber Location 016286M 016391M 016392M 016393M 016516M 016575M 016576M 016577M GillingRiver GillingRiver GillingRiver GillingRiver AstrayLake 22 1 1 1 36 550 25 25 25 900 25 75 25 1,650 12Apr04 28Jul09 28Jul09 28Jul09 2Sep09 10Jan05 10Jan05 10Jan05
HoustonLake 1 HoustonLake 3 HoustonLake 1 TOTAL 66
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Figure1 ProjectLocationMap
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Houston Property
Figure2 MapofLIMMiningLicenses
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5. ACCESSIBILITY,CLIMATE ,LOCALRESOURCES, INFRASTRUCTURE,PHYSIOGRAPHY(ITEM7)

5.1 ACCESSIBILITY
TheLIMpropertiesarepartofthewestcentralpartoftheLabradorTroughironrange.Themineral propertiesarelocatedabout1,140kmnortheastofMontrealandadjacenttoorwithin70kmofthe townofSchefferville(Quebec).TherearenoroadsconnectingtheareatosouthernLabradororto Quebec.AccesstotheareaisbyrailfromSeptlestoScheffervilleorbyairfromMontrealandSept les. SomeofthepropertiesinwesternLabradorthatLIMinitiallyintendstoexploit,theJames, Redmond,GillMine,RuthLake8,GreenLake,Ryan,andKnobLake1deposits,areaccessibleby existinggravelroadsandarelocated,inLabrador,approximately3to6kmsouthsouthwestofthe townofScheffervillewhiletheRedmonddepositsarelocatedafurther10kmtothesouth southwestandcanbereachedbyexistinggravelroads. TheHoustondepositislocatedapproximately20kmsoutheastofScheffervilleandcanalsobe reachedbyexistinggravelroads,althoughLIMwillconsidertheconstructionofanew10kmall weatheraccessroadbetweenHoustonandtheRedmondminesite. AccesstotheJamesandKnobLakedepositsispossibleallyearroundastheyarelocatedcloseto theroadconnectingthetownofScheffervilletotheMenihekhydroelectricdam.Theotheraccess roadsarenotcurrentlymaintainedduringthewintermonths.
5.2 CLIMATE
TheScheffervilleareaandvicinityhaveasubarcticcontinentaltaigaclimatewithverysevere winters.Dailyaveragetemperaturesexceed0Cforonlyfivemonthsayear.Dailymean temperaturesforScheffervilleaverage24.1Cand22.6CinJanuaryandFebruaryrespectively. MeandailyaveragetemperaturesinJulyandAugustare12.4Cand11.2C,respectively.Snowfallin November,DecemberandJanuarygenerallyexceeds50cmpermonthandthewettestsummer monthisJulywithanaveragerainfallof106.8mm.
5.3 LOCALRESOURCES
ItisassumedthatthemajorityoftheworkforcewillcomefromLabradororNewfoundlandtowork ontheproject.AnumberofemployeeswillalsoberecruitedfromtheQuebeccommunitiescloseto theprojectsite.
5.4 INFRASTRUCTURE
James,Redmond2BandRedmond5arewithin12kmofeachotherandformthefirstgroupof propertiesfromwhichLIMplanstocommenceminingandarealsowithin12kmofSchefferville. TheGill,RuthandKnobLakedepositsarewithinthesamearea,whiletheHoustonpropertyis locatedabout20kmsoutheastofSchefferville.
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ThetownofScheffervillehasaFireDepartmentwithmainlyvolunteerfiremen,afirestationand firefightingequipment.TheSretDuQubecPoliceForceispresentinthetownofSchefferville andtheMatimekushLacJohnreserve.AclinicispresentinScheffervillewithlimitedmedicalcare. Amunicipalgarage,smallmotorrepairshops,alocalhardwarestore,amechanicalshop,andalocal convenientstore,2hotels,numerousoutfittersaccommodationsarealsopresentinSchefferville. Amodernairportincludesa2,000metrepavedrunwayandnavigationalaidsforpassengerjet aircraft.AirserviceisprovidedthreetimesperweektoandfromWabush,Labrador,withless frequentservicetoMontreal. Acommunityradiostation,recreationcentre,parishhall,gymnasium,playground,childcarecentre, dropincentrearealsopresentinSchefferville. TheMenihekpowerplantislocated35kmsoutheastofSchefferville.Thehydropowerplantwas builttosupportironoreminingandservicesinSchefferville.Backupdieselgeneratorsarealso present.
5.4.1 THERAILROAD
ScheffervilleisaccessiblebytrainfromSeptlesbyTshiuetinRailTransportationInc.(TSH),a companyownedbythreeQuebecFirstNations.ThemandateofTSHistomaintainthepassenger andlightfreighttrafficbetweenSeptlesandSchefferville.TraindeparturesfromSeptlesand Scheffervilleoccurthreetimesaweek. TheQNS&LwasestablishedbyIOCtohaulironorefromScheffervilleareaminestoSeptlesa distanceofsome568kmstartingin1954.Aftershippingsome150milliontonsofironorefromthe areatheminingoperationwasclosedin1982,although,asacommoncarrier,therailroad maintainedapassengerandfreightservicebetweenSeptles,LabradorCityandScheffervilleup to2005.In2005theIOCsoldthe208kmsectionoftherailwaybetweenEmerilJunctionand ScheffervilletoTSH. Threeotherrailwaycompaniesoperateinthearea,ArnaultRailwaysbetweenArnaultJunctionand PointeNoiretohaulironoreforWabushMines(Wabush),QNS&Lforhaulingironconcentrates fromLabradorCityareatoSeptIlesandCRChaulsironconcentratesfromFermontareatoPort CartierforQuebecCartierMiningCompany.ThelatterrailwayisnotconnectedtoArnault,QNS&L orTSH.
5.5 PHYSIOGRAPHY
ThetopographyoftheScheffervilleminingdistrictisbedrockcontrolledwiththeaverageelevation ofthepropertiesvaryingbetween500mand700mabovesealevel.Theterrainisgenerallygently rollingtoflat,slopingnorthwesterly,withatotalreliefofapproximately50to100m.Inthemain miningdistrict,thetopographyconsistsofaseriesofNWSEtrendingridgeswhiletheAstrayLake andSawyerLakeareasarewithintheLabradorLakePlateau.Topographichighsintheareaare normallyformedbymoreresistantquartzites,chertsandsilicifiedhorizonsoftheironformation itself.Lowsarecommonlyunderlainbysoftersiltstonesandshales. Generally,theareaslopesgentlywesttonortheastawayfromthelandrepresentingtheQuebec LabradorborderandtowardstheHowellsRivervalleyparalleltothedipofthedeposits.The fingershapedareaofLabradorthatenclosestheHowellsRiverdrainssouthwardsintothe
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HamiltonRiverwatershedandfromthereintotheAtlanticOcean.Streamstotheeastandwestof theheightoflandinQuebec,flowintotheKaniapiskauwatershed,whichflowsnorthintoUngava Bay. Theminingdistrictiswithinazoneoferosioninthatthelastperiodofglaciationhaserodedaway anypreexistingsoil/overburdencover,withthezoneofdepositionofthesesedimentsbeingwell awayfromtheareaofinterest.Glaciationendedintheareaaslittleas10,000yearsagoandthereis verylittlesubsequentsoildevelopment.Vegetationcommonlygrowsdirectlyonglacialsediments andthelandscapeconsistsofbedrock,athinveneeroftillaswellaslakesandbogs. Thethinveneeroftillintheareaiscomposedofbothglacialandglacialfluvialsediments.Tills depositedduringtheearlyphasesofglaciationswerestronglyaffectedbylatersubglacialmelt watersduringglacialretreat.Commonly,thecompositionoftillissandygravelwithlessersilty clay,mostlypreservedintopographiclows.Glacialmeltwaterchannelsarepreservedinthesides ofridgesbothnorthandsouthofSchefferville. GlacialiceflowintheareahasbeenrecordedasanearlymajorNWtoSEflowandalaterless pronouncedSWtoNEflow.Theearlyphasewasalongstrikewiththemajorgeologicalfeaturesand thefinalepisodewasagainstthetopography.ThelaterNEflowbecomesmorepronouncedtowards thesouthernendofthedistrictnearAstrayLakeorDykeLake.
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6. HISTORY(ITEM8)
TheQuebecLabradorIronRangehasatraditionofminingsincetheearly1950sandisoneofthe largestironproducingregionsintheworld.Theformerdirectshippingironoreoperationsat ScheffervilleoperatedbyIOCproducedinexcessof150milliontonsoflumpandsinterfineores overtheperiod19541982.ThepropertiescomprisingLIMsScheffervilleareaprojectwerepartof theoriginalIOCScheffervilleoperationsandformedpartofthe250milliontonsofreservesand resourcesidentifiedbyIOCbutwerenotpartofIOCsproducingproperties1. TherearecurrentlythreemajorironoreproducersintheLabradorCityWabushregiontothe south,IOC,QuebecCartierMiningCompanyandWabushMines.Threemajornewironoreprojects intheQuebecLabradorPeninsulaarecurrentlyatthefeasibilityorconstructionstage. TheLabradorTroughwhichformsthecentralpartoftheQuebecLabradorPeninsula,isaremote regionwhichremainedlargelyunexploreduntilthelate1930sandearly1940swhenthefirst seriousmineralexplorationwasinitiatedbyHollingerandLM&E.Thesecompaniesweregranted largemineralconcessionsintheQuebecandLabradorportionsoftheTrough.Initially,the emphasiswasonexploringforbaseandpreciousmetalsbut,asthemagnitudeoftheirondeposits intheareabecameapparent,developmentoftheseresourcesbecametheexclusivepriorityfora numberofyears. Miningandshippingfromtheareabeganin1954underthemanagementoftheIOC,acompany specificallyformedtoexploittheScheffervilleareairondeposits.Asthetechnologyofthesteel industrychangedovertheensuingyearsmoreemphasiswasplacedontheconcentratingoresof theWabushareaandinterestandmarketsforthedirectshippingScheffervilleoresdeclined. Finally,in1982,theIOCclosedtheiroperationsintheScheffervillearea.From1954to1982,atotal ofsome150milliontonsoforewasproducedfromthearea. In1954,IOCstartedtooperateopenpitminesinScheffervillecontaining5658%Fe,andexported thedirectshippingproducttosteelcompaniesintheUnitedStatesandWesternEurope.The propertiesandirondepositsthatcurrentlyformLIMsLabradorProjectwerepartoftheoriginal IOCScheffervilleareaoperations. Duringthe1960s,highergradeirondepositsweredevelopedinAustraliaandSouthAmericaand customerspreferencesshiftedtoproductscontaining+62%Feorhigher.In1963,IOCdeveloped theCarolLakedepositnearLabradorCityandstartedtoproduceconcentratesandpelletswith +64%Fe,soastosatisfythecustomersrequirementsforhighergradeproducts.Highgrowthin thedemandforsteel,whichbeganaftertheendofWorldWarII,cametoanabruptendintheearly 1980sduetotheimpactofincreasingoilprices.Theenergycrisisaffectedsteelproductioninthe U.S.andWesternEuropeasconsumersswitchedtoenergyefficientproducts.Asaresult,the demandforironoreplummeted,creatingasevereovercapacityintheindustry.Consequently,IOC decidedtoclosetheScheffervilleareaminesin1982.
1ThisisanhistoricestimatemadeincompliancewiththestandardsusedbyIOC.
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Hollinger,asubsidiaryofNorcenEnergyLtd.,wastheunderlyingowneroftheQuebecironore miningleasesinScheffervillearea.FollowingtheclosureoftheIOCminingoperations,ownership oftheminingrightsheldbyIOCinLabradorrevertedtotheCrown.Intheearly1990s,Hollinger wasacquiredbyLaFossePlatinumGroupInc.(LaFosse)whoconductedfeasibilitystudieson marketing,bulksampling,metallurgicaltestworkandcarriedoutsomestrippingofoverburdenat theJamesdeposit.LaFossesoughtandwasgrantedaprojectreleaseundertheEnvironmental AssessmentActfortheJamesdepositinJune1990butdidnotgoaheadwithprojectdevelopment andtheclaimssubsequentlywerepermittedtolapse. WiththeexceptionoftheprestrippingworkcarriedoutontheJamesdepositandtheminingofthe Redmond#1orebodybyIOC(adjacenttoLIMscurrentRedmondproperty),noneoftheiron depositswithintheLIMmineralclaimswerepreviouslydevelopedforproductionduringtheIOC periodofownership. BetweenSeptember2003andMarch2006,FentonandGraemeScott,EnergoldandNMLbegan stakingclaimsoverthesoftironoresintheLabradorpartoftheScheffervillecamp.Recognizinga needtoconsolidatethemineralownership,Energoldenteredintoagreementswiththevarious partiesthathavesubsequentlybeenassumedbyLIM.
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7. GEOLOGICALSETTING(ITEM9)
7.1 REGIONALGEOLOGY
ThefollowingsummarizesthegeneralgeologicalsettingsoftheHoustonpropertyandtheother propertiesmakingupLIMsWesternLabradorironoreproject.Theregionalgeologicaldescriptions arebasedonpublishedreportsbyGross(1965),Zajac(1974),Wardel(1979)andNeale(2000)and werefirstpreparedbytheauthorforaninternalscopingstudyreportforLIMin2006. Atleast45hematitegoethiteoredepositshavebeendiscoveredinanarea20kmwidethatextends 100kmnorthwestofAstrayLake,referredtoastheKnobLakeIronRange,whichconsistsoftightly foldedandfaultedironformationexposedalongtheheightoflandthatformstheboundary betweenQuebecandLabrador.Theirondepositsoccurindeformedsegmentsofironformation, andtheorecontentofsingledepositsvariesfromonemilliontomorethan50milliontonnes. TheKnobLakepropertiesarelocatedonthewesternmarginoftheLabradorTroughadjacentto Archeanbasementgneisses.TheLabradorTroughotherwiseknownastheLabradorQuebecFold Beltextendsformorethan1,000kmalongtheeasternmarginoftheSuperiorcratonfromUngava BaytoLakePletipi,Quebec.Thebeltisabout100kmwideinitscentralpartandnarrows considerablytothenorthandsouth. ThewesternhalfoftheLabradorTrough,consistingofathicksedimentarysequence,canbe dividedintothreesectionsbasedonchangesinlithologyandmetamorphism(North,Centraland South).TheTroughiscomprisedofasequenceofProterozoicsedimentaryrocksincludingiron formation,volcanicrocksandmaficintrusionsknownastheKaniapiskauSupergroup (Gross,1968).TheKaniapiskauSupergroupconsistsoftheKnobLakeGroupinthewesternpartof theTroughandtheDoubletGroup,whichisprimarilyvolcanic,intheeasternpart. TheCentralorKnobLakeRangesectionextendsfor550kmsouthfromtheKoksoakRivertothe GrenvilleFrontlocated30kmnorthofWabushLake.Theprincipalironformationunit,the SokomanFormation,partoftheKnobLakeGroup,formsacontinuousstratigraphicunitthat thickensandthinsfromsubbasintosubbasinthroughoutthefoldbelt. ThesouthernpartoftheTroughiscrossedbytheGrenvilleFront.TroughrocksintheGrenville Provincetothesoutharehighlymetamorphosedandcomplexlyfolded.Irondepositsinthe GrenvillepartoftheLabradorTroughincludeLacJeannine,FireLake,MountsWrightandReedand theLuce,HumphreyandScullydepositsintheWabusharea.Thehighgrademetamorphismofthe GrenvilleProvinceisresponsibleforrecrystallizationofbothironoxidesandsilicainprimaryiron formationproducingcoarsegrainedsugaryquartz,magnetite,specularhematiteschists(meta taconites)thatareofimprovedqualityforconcentratingandprocessing. ThemainpartoftheTroughnorthoftheGrenvilleFrontisintheChurchillProvinceandhasbeen subjectedtolowgrade(greenschistfacies)metamorphism.InareaswestofUngavaBay, metamorphismincreasestoloweramphibolitegrade.TheminesdevelopedintheScheffervillearea byIOCexploitedresiduallyenrichedearthyirondepositsderivedfromtaconitetypeprotores. GeologicalconditionsthroughoutthecentraldivisionoftheLabradorTrougharegenerallysimilar tothoseintheKnobLakeRange.
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AgeneralgeologicalmapofLabradorisshowninFigure3.
7.2 LOCALGEOLOGY
ThegeneralstratigraphyoftheKnobLakeareaisrepresentativeofmostoftheKnobLakeRange, exceptthattheDenaultdolomiteandFlemingFormationarenotuniformlydistributed.TheKnob LakeRangeoccupiesanarea100kminlengthby8kminwidth.Thesedimentaryrocks,including thechertyironformation,areweaklymetamorphosedtogreenschistfacies.Inthestructurally complexareas,leachingandsecondaryenrichmenthaveproducedearthytexturedirondeposits. Unaltered,banded,magnetiteironformation,oftenreferredtoastaconite,occursasgentlydipping bedswestofSchefferville,intheHowellsRiverarea. ThesedimentaryrocksintheKnobLakeRangestrikenorthwest,andtheircorrugatedsurface appearanceisduetoparallelridgesofquartziteandironformationwhichalternatewithlow valleysofshalesandslates.TheHudsonianOrogenycompressedthesedimentsintoaseriesof synclinesandanticlines,whicharecutbysteepanglereversefaultsthatdipprimarilytotheeast. Thesynclinesaregenerallyoverturnedtothesouthwestwiththeeastlimbscommonlytruncated bystrikefaults. Mostofthesecondary,earthytexturedirondepositsoccurincanoeshapedsynclines;someare tabularbodiesextendingtoadepthofatleast200m,andoneortwodepositsarerelativelyflat lyingandcutbyseveralfaults.InthewesternpartoftheKnobRange,theironformationdipsgently eastwardovertheArcheanbasementrocksforabout10kmtotheeast,thenformsanimbricate faultstructurewithbandsofironformation,repeateduptoseventimes. Subsequent,supergeneprocessesconvertedsomeoftheironformationsintohighgradeores, preferentiallyinsynclinaldepressionsand/ordownfaultedblocks.Originalsedimentarytextures arecommonlypreservedbyselectedleachingandreplacementoftheoriginaldeposits.Jumbled brecciasofenrichedoreandalteredironformations,locallycalledrubbleores,arealsopresent. FossiltreesandleavesofCretaceousagehavebeenfoundinrubbleoresinsomeofthedeposits (Neal,2000).
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Figure3 GeologicalMapofLabrador
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7.3 GEOLOGYOFSCHEFFERVILLEAREA
ThestratigraphyoftheScheffervilleareaisasfollows: AttikamagenFormationisexposedinfoldedandfaultedsegmentsofthestratigraphic successionwhereitvariesinthicknessfrom30metresnearthewesternmarginofthebelttomore than365metresnearKnobLake.Thelowerpartoftheformationhasnotbeenobserved.It consistsofargillaceousmaterialthatisthinlybedded(23mm),finegrained(0.02to0.05mm), grayishgreen,darkgreytoblack,orreddishgrey.Calcareousorarenaceouslensesasmuchas 30cminthicknessoccurlocallyinterbeddedwiththeargilliteandslate,andlensesofchertare common.TheformationgradesupwardsintoDenaultdolomite,orintoWishartquartziteinarea wheredolomiteisabsent.Bedsareintricatelydragfolded,andcleavageiswelldevelopedparallel withaxialplanes,perpendiculartoaxiallinesoffoldsandparallelwithbeddingplanes. DenaultFormationisinterbeddedwiththeslatesoftheAttikamagenFormationatitsbaseand gradesupwardsintothechertbrecciaorquartziteoftheFlemingFormation.TheDenault Formationconsistsprimarilyofdolomite,whichweathersbuffgreytobrown.Mostofitoccursin fairlymassivebedswhichvaryinthicknessfromafewcentimetrestoaboutonemetre,someof whicharecomposedofaggregatesofdolomitefragments. NearKnobLaketheformationprobablyhasamaximumthicknessof180metresbutinmanyother placesitformsdiscontinuouslensesthatare,atmost,30metresthick.Leachedandalteredbeds neartheirondepositsarerubbly,brownorcreamcoloredandcontainanabundanceofchertor quartzfragmentsinasoftwhitesiliceousmatrix. FlemingFormationoccursafewkilometressouthwestofKnobLakeandonlyabovedolomite bedsoftheDenaultFormation.Ithasamaximumthicknessofabout100metresandconsistsof rectangularfragmentsofchertandquartzwithinamatrixoffinechert.Inthelowerpartofthe formationthematrixisdominantlydolomitegradingupwardsintochertandsiliceousmaterial. WishartFormationQuartziteandarkoseoftheWishartFormationformoneofthemost persistentunitsintheKaniapiskauSupergroup.Thickbedsofmassivequartzitearecomposedof wellroundedfragmentsofglassyquartzand1030%roundedfragmentsofpinkandgreyfeldspar, wellcementedbyquartzandminoramountsofhematiteandotherironoxides.Freshsurfacesof therockaremediumgreytopinkorred.Thethicknessofthebedsvariesfromafewcentimetresto aboutonemetrebutexposuresofmassivequartzitewithnoapparentbeddingoccurmost frequently. RuthFormationOverlyingtheWishartFormationisablack,greygreenormaroonferruginous slate,3to36metresthick.Thisthinlybanded,fissilematerialcontainslensesofblackchertand variousamountsofironoxides.ItiscomposedofangularfragmentsofquartzwithKfeldspar sparselydistributedthroughaveryfinemassofchlorite,whitemica,ironoxidesandabundant finelydisseminatedcarbonandopaquematerial.Muchoftheslatecontainsmorethan20%iron. SokomanFormationMorethan80%oftheoreintheKnobLakeRangeoccurswithinthis formation.Lithologicallytheironformationvariesindetailindifferentpartsoftherangeandthe thicknessofindividualmembersisnotconsistent. Athinlybedded,slatyfaciesatthebaseoftheformationconsistslargelyoffinechertwithan abundanceofironsilicatesanddisseminatedmagnetiteandsiderite.Freshsurfacesaregreyto
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olivegreenandweatheredsurfacesbrownishyellowtobrightorangewhereminnesotaiteis abundant. Thinbandedoxidefaciesofironformationoccursabovethesilicatecarbonatefaciesinnearlyall partsofthearea.Thejasperbands,whichare1.25cmorlesswideanddeepred,orinafewplaces greenishyellowtogrey,areinterbandedwithhard,bluelayersoffinegrainedhematiteandalittle magnetite. Thethinjasperbedsgradeupwardsintothickmassivebedsofgreytopinkishchertandbedsthat areveryrichinblueandblackironoxides.Thesemassivebedsarecommonlyreferredtoas chertymetallicironformationandmakeupmostoftheSokomanFormation.Theironoxidesare usuallyconcentratedinlayersafewcentimetresthickinterbeddedwithleanerchertybeds.In manyplacesironrichlayersandlensescontainmorethan50%hematiteandmagnetite. TheupperpartoftheSokomanFormationcomprisesbedsofdullgreentogreyorblackmassive chertthatcontainsconsiderablesideriteorotherferruginouscarbonate.Beddingisdiscontinuous andtherockasawholecontainsmuchlessironthanthelowerpartoftheformation. MenihekFormationAthinbanded,fissile,greytoblackargillaceousslateconformablyoverlies theSokomanFormationintheKnobLakearea.Totalthicknessisnotknown,astheslateisonly foundinfaultedblocksinthemainorezone.EastorsouthofKnobLake,theMenihekFormationis morethan300metresthickbuttightfoldingandlackofexposurepreventdeterminationofitstrue thickness. TheMenihekslateismostlydarkgreyorjetblack.Ithasadullsootyappearancebutweatherslight greyorbecomesbuffcoloredwhereleached.Beddingislessdistinctthanintheslatesofotherslate formationsbutthinlaminaeorbedsarevisibleinthinsections.
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8. DEPOSITTYPES(ITEM10)
8.1 IRONORE
TheLabradorTroughcontainsfourmaintypesofirondeposits: Softironoresformedbysupergeneleachingandenrichmentoftheweaklymetamorphosedcherty ironformation;theyarecomposedmainlyoffriablefinegrainedsecondaryironoxides(hematite, goethite,limonite). Taconites,thefinegrained,weaklymetamorphosedironformationswithaboveaveragemagnetite contentandwhicharealsocommonlycalledmagnetiteironformation. Moreintenselymetamorphosed,coarsergrainedironformations,termedmetataconites;which containspecularhematiteandsubordinateamountsofmagnetiteasthedominantironminerals. OccurrencesofhardhighgradehematiteoreoccursoutheastofScheffervilleatSawyerLake, AstrayLakeandinsomeoftheHoustondeposits. TheLIMdepositsarecomposedofironformationsoftheLakeSuperiortype.TheLakeSuperior typeironformationconsistsofbandedsedimentaryrockscomposedprincipallyofbandsofiron oxides,magnetiteandhematitewithinquartz(chert)richrock,withvariableamountsofsilicate, carbonateandsulphidelithofacies.Suchironformationshavebeentheprincipalsourcesofiron throughouttheworld. TheSokomanironformationwasformedasachemicalsedimentundervariedconditionsof oxidationreductionpotential(Eh)andhydrogenionconcentrations(pH)invarieddepthof seawater.Theresultingirregularlybedded,jasperbearing,granular,ooliteandlocally conglomeraticsedimentsaretypicalofthepredominantoxidefaciesoftheSuperiortypeiron formations,andtheLabradorTroughisthelargestexampleofthistype. Thefacieschangesconsistcommonlyofcarbonate,silicateandoxidefacies.Typicalsulphidefacies arepoorlydeveloped.Themineralogyoftherocksisrelatedtothechangeinfaciesduring deposition,whichreflectschangesfromshallowtodeepwaterenvironmentsofsedimentation.In general,theoxidefaciesareirregularlybedded,andlocallyconglomeratic,havingformedin oxidizingshallowwaterconditions.Mostcarbonatefaciesshowdeepwaterfeatures,exceptforthe presenceofminoramountsofgranules.Thesilicatefaciesarepresentinbetweentheoxideand carbonatefacies,withsometexturalfeaturesindicatingdeepwaterformation. Faciescontainstypicalprimaryminerals,rangingfromsiderite,minnesotaite,andmagnetite hematiteinthecarbonate,silicateandoxidefacies,respectively.Themostcommonmineralinthe SokomanFormationischert,whichiscloselyassociatedwithallfacies,althoughitoccursinminor quantitieswiththesilicatefacies.Carbonateandsilicatelithofaciesarepresentinvaryingamounts intheoxidemembers. ThesedimentsoftheLabradorTroughwereinitiallydepositedinastablebasinwhichwas subsequentlymodifiedbypenecontemporaneoustectonicandvolcanicactivity.Depositionofthe ironformationindicatesintraformationalerosion,redistributionofsediments,andlocal contaminationbyvolcanicandrelatedclasticmaterialderivedfromthevolcaniccentersinthe DykeAstrayarea.
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8.1.1 HOUSTON
TheHoustonpropertyislocatedapproximately20kmsoutheastofScheffervilleandcanbereached byexistinggravelroads.TheHoustonprojectareaiscomposedofwhatappeartobeatleastthree separateareasofironenrichmentwithacontinuouslymineralizedzoneofover3kminstrike lengthandwhichremainsopentothesouth.Thethreeareasofenrichmentarereferredtoasthe Houston1,Houston2SandHouston3deposits.Ironoreofdirectshippingqualityextends northwestsoutheastfor3kmwithalateralextentofupto150metresinitswidersection. TheHoustonirondepositsarestratigraphicallyandstructurallycontrolled,andconsistofhardand friablebanded,blueandredhematitethatlocallybecomesmassive.Airbornemagnetometersurvey dataavailablefromtheGeoscienceDataRepositoryofNaturalResourcesCanadasuggeststhatthe ironoreisconcentratedalongthewesternflank(gradient)ofamodesttostrongmagneticfeature, whichtrendsapproximately330.TheHouston1andHouston2Sdepositsarenotcoincidentwith thestrongestmagneticfeatures,duetothepoormagneticsusceptibilityofthistypeof mineralization.Thiswasconfirmedinthetestingofhandspecimens. IOCdrilledandtrenchedtheHoustondepositandpreparedreserveandresourcecalculations whichwerecontainedintheirStatementofReservesatDecember31,1982. LIMcarriedoutdrillingduringthe2006,2008and2009programswhichindicatedthatthe majorityofthepotentiallyeconomicironmineralizationintheHoustonareaoccurswithinthe upperironformation(UIF)andmiddleironformation(MIF)withlesseramountsintheSCIF (silicatecarbonateironformation).TheamountofredoreassociatedwiththeRuthFormation appearstobeminimalifnotabsent.Mineralizationinseveralholesisfoundtoterminateinared chert,whichmaybetheLowerRedChertmemberthatoccursattheboundaryoftheMIFandSCIF. Strikingnorthwestanddippingtothenortheast,bothHouston1and2mineralizationhasbeen foundtoextenddowndiptothenortheast.Thesedowndipextensionshadnotbeenpreviously testedbyIOCwhenminingoperationsintheareaended..DrillingbyLIMhasintersectedthese extensionsandatthepresenttimeboththeHouston1and2depositsremainopendowndip. TheHouston3depositappearstobemoreverticalinnatureanddrillholestestingtheeastern marginoftheknowndeposithavenotinterceptedanyeastwardextensions.However,thisdeposit hasyettobetestedtoitsmaximumverticaldepth. MenihekSlatewasencounteredindrillchipsinholeRCHU011(2008)inthemostsoutherlyhole drilledontheHouston3property.AtthislocationMenihekSlatehasbeenthrustupandoverthe SokomanIronFormation.CrosssectionsoftheHoustondepositdatingfromIOCexploration indicatethepresenceofareversefaultstrikingNWthroughtheHouston1and2Sdeposits.
8.2 MANGANESEDEPOSITS
ThemanganesedepositsintheScheffervilleareawereformedbyresidualandsecondstage (supergene)enrichmentthataffectedtheSokoman(iron)Formation,somemembersofwhich containupto1%Mnintheirunalteredstate.Theresidualenrichmentprocessinvolvedthe migrationofmeteoricfluidscirculatedthroughtheprotooresequenceoxidizingtheiron formation,recrystallizingironmineralstohematite,andleachingsilicaandcarbonate.Theresultis aresiduallyenrichedironformationthatmaycontainupto10%Mn.Thesecondphaseofthis process,whereithasoccurred,isatrueenrichmentprocess(ratherthanaresidualenrichment),
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wherebyironoxides(goethite,limonite),hematiteandmanganeseareredistributedlaterallyor stratigraphicallydownwardintothesecondaryporositycreatedbytheremovalofmaterialduring theprimaryenrichmentphase. Depositionalongfaults,fracturesandcleavagesurfaces,andinveinsandveinletsisalsoseen,and corroboratestheacceptedbeliefthatthestructuralbreaksactaschannelwaysformigrating hydrothermalfluidscausingmetasomaticalterationandformationofmanganiferousdeposits.All themanganeseoccurrencesintheLabradorTroughareconsideredtohavebeendepositedbythe processesdescribedabove.
8.2.1 HOUSTON
ThemanganesemineralizationintheHoustondepositispresentinrelativelylowconcentrations (6%average)withsporadicconcentrationsofupto24%hostedintheMiddleIronFormation apparentlystructurallycontrolledbyfoldingandfaultingalongthewesternblockoftheeast dippingreversefaultsystem.
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9. MINERALIZATION (ITEM11)
9.1 IRONORE
TheearthybeddedirondepositsarearesiduallyenrichedtypewithintheSokomanironformation thatformedaftertwoperiodsofintensefoldingandfaulting,followedbythecirculationofmeteoric watersinthefracturedrocks.Theenrichmentprocesswascausedlargelybyleachingandtheloss ofsilica,resultinginastrongincreaseinporosity.Thisproducedafriable,granularandearthy texturedironore.Thesideriteandsilicamineralswerealteredtohydratedoxidesofgoethiteand limonite.Thesecondstageofenrichmentincludedtheadditionofsecondaryironandmanganese whichappeartohavemovedinsolutionandfilledporespaceswithlimonitegoethite.Secondary manganeseminerals,i.e.,pyrolusiteandmanganite,formveinletsandvuggypockets.Thetypesof ironoresdevelopedinthedepositsaredirectlyrelatedtotheoriginalmineralfacies.The predominantbluegranularorewasformedfromtheoxidefaciesofthemiddleironformation.The yellowishbrownore,composedoflimonitegoethite,formedfromthecarbonatesilicatefacies,and theredpaintyhematiteoreoriginatedfrommixedfaciesintheargillaceousslatymembers.The overallratioofbluetoyellowtoredoreintheScheffervilleareadepositsisapproximately70:15:15 butcanvarywidelywithinandbetweenthedeposits. Onlythedirectshippingoreisconsideredbeneficiabletoproducelumpandsinterfeedwhichwill bepartoftheresourcesforLIMsdevelopmentproject.Thedirectshippingorewasclassifiedby IOCincategoriesbasedonchemical,mineralogicalandtexturalcompositions.Thisclassificationis showninTable4. Table4 ClassificationofIronOreTypes
ScheffervilleOre Types (FromIOCC):

TYPE
NB(Non bessemer) LNB(Leannon bessemer) HMN (HighManganiferous) LMN(LowManganiferous) HiSiO2(HighSilica) TRX(TreatRock) HiAl (HighAluminium) Waste ORECOLOURS T_Fe% T_Mn% T_Si% Blue,Red,Yellow >=55.0 <3.5 <10.0 Blue,Red,Yellow >=50.0 <3.5 <18.0 Blue,Red,Yellow (Fe+Mn) >=50.0 >6.0 <18.0 Blue,Red,Yellow (Fe+Mn) >=50.0 3.5 6.0 <18.0 Blue >=50.0 18.030.0 Blue 40.050.0 18.030.0 Blue,Red,Yellow >=50.0 <18.0 All material thatdoesnotfall intoanyof thesecategories. T_Al2O3% <5.0 <5.0 <5.0 <5.0 <5.0 <5.0 >5.0
Theblueores,whicharecomposedmainlyofthemineralshematiteandmartite,aregenerally coarsegrainedandfriable.Theyareusuallyfoundinthemiddlesectionoftheironformation. Theyellowores,whicharemadeupofthemineralslimoniteandgoethite,arelocatedinthelower sectionoftheironformationinaunitreferredtoasthesilicatecarbonateironformationorSCIF.
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Theredoreispredominantlyaredearthyhematite.Itformsthebasallayerthatunderliesthelower sectionoftheironformation.Redoreischaracterizedbyitsclayandslateliketexture. DirectshippingoresandleanoresminedintheScheffervilleareaduringtheperiod19541982 amountedtosome150milliontons.BasedontheoriginaloredefinitionofIOC(+50%Fe<18%SiO 2 drybasis),approximately250milliontonnesofironresourcesremainintheScheffervillearea, exclusiveofmagnetitetaconite.LIMhasacquiredtherightstoapproximately50%ofthisremaining historicironresourceinLabrador2.
9.2 MANGANESEORE
Foraneconomicmanganesedeposit,thereneedstobeaminimumprimarymanganesecontentata givenmarketprice(generallygreaterthan5%Mn),butalsothemanganeseoxidesmustbe amenabletoconcentration(beneficiation)andtheresultantconcentratesmustbelowin deleteriouselementssuchassilica,aluminum,phosphorus,sulphurandalkalis.Beneficiation involvessegregatingthesilicateandcarbonatelithofaciesandotherrocktypesinterbeddedwithin themanganeserichoxides. TheprinciplemanganesedepositsfoundintheScheffervilleareacanbegroupedintothreetypes: ManganiferousirondepositsthatoccurwithinthelowerSokomanFormation.Theseareassociated withinsituresidualenrichmentprocessesrelatedtodownwardandlateralpercolationofmeteoric waterandgroundwateralongstructuraldiscontinuitiessuchasfaultsandfractures,penetrative cleavageassociatedwithfoldhinges,andnearsurfacepenetration.Thesetypicallycontainfrom5 10%Mn. Ferruginousmanganesedeposit,generallycontain1035%Mn.Thesetypesofdepositsarealso associatedwithstructuraldiscontinuities(e.g.,fault,welldevelopedcleavage,fracturezones)and maybehostedbytheSokoman(iron)Formation(e.g.,theRyan,DannickandAvisondeposits),or bythestratigraphicallylowersilicarichFlemingandWishartformations(e.g.theRuthA,BandC deposits).Thesearetheresultofresidualandsupergeneenrichmentprocesses. Socalledmanganeseoccurrencesormanganeseoredepositscontainatleast35%Mn.These depositsaretheresultofsecondary(supergene)enrichmentandaretypicallyhostedintheWishart andFlemingformations,stratigraphicallybelowtheironformation.

2ThesenumbersarebasedonhistoricestimatesmadeincompliancewiththestandardsusedbyIOC.
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10. EXPLORATION(ITEM12)
10.1 PASTEXPLORATION
In1929,apartyledbyJ.E.GillandW.F.JamesexploredthegeologyaroundSchefferville,Quebec andnamedtheareaFerrimangoHills.Inthecourseoftheirfieldwork,theydiscoveredenriched ironore,ordirectshippingoredepositswestofSchefferville,whichtheynamedFerrimangoHills 1,2and3.ThesewerelaterrenamedtheRuthLake1,2and3depositsbyJ.A.Retty. In1936,J.S.Wishart,amemberofthe1929mappingexpedition,mappedtheareaaroundRuth LakeandWishartLakeingreaterdetail,withtheobjectiveofoutliningnewironoreoccurrences. In1937,W.C.HowellstraversedtheareaoftheRuthLakePropertyaspartofawatercoursesurvey betweentheKivivicandAstraylakesnowknownasHowellsRiver. In1945,areportbyLM&EdescribestheworkofA.T.GriffisintheWishartRuthFlemingarea. Thereportincludesgeologicalmapsanddetaileddescriptionsofthephysiography,stratigraphy andgeologyofthearea,andoftheRuthLake1,2and3orebodies.Griffisrecognizedthattheiron oreunit(SokomanFormation)wasstructurallyrepeatedbyfoldingandfaultingandremarkedthat Thepotentialtonnageofhighgradeirondepositsisconsideredtobegreat. In1946and1947,geologicalmappingofthesoutheastareaoftheWishartKnobLakeareatowards AstrayLakecarriedoutbyLM&Enotedanumberofareaswithpotentialeconomicmineralization thatledthediscoveryoftheHouston1and2depositsin1950. MostexplorationonthepropertieswascarriedoutbytheIOCfrom1954untiltheclosureoftheir Scheffervilleoperationin1982.Mostdatausedintheevaluationofthecurrentstatusprovidedin thenumerousdocuments,sectionsandmapsproducedbyIOCorbyconsultantsworkingforthem. In1989and1990,LaFosseandHollingerundertookanextensiveexplorationprogramfor manganeseon46knownoccurrencesintheScheffervillearea,includingthoseontheRuthLake Property,dividedatthetimeintoRuthLakeprospects,RyanshowingandAvisonshowing. Workperformedduringthesummerandfallof1989consistedofgeologicalmapping,prospecting andsampling,airtracdrilling(26holestotalling478ft=146m),andaVLFgroundgeophysical survey.Alsoin1989,theLaFossePlatinumGroupcarriedoutexplorationontheRyanmanganese showing.Workconsistedofstrippingandtrenching(12trenchestotaling1970ft=601m),chip samplingandairtracdrilling(25holes)coupledwithsamplingofcuttings.Inaddition,an1,800ton bulksamplewasobtainedandstockpiledforanalysis.Representativesamplesweretakenfromthe bulksamplestockpileandyieldedanaverageof23.1%Mnand20.4%Fe. In1990,LaFossereturnedtotheRyanmanganeseshowingtocontinueexploration.Theirwork furtherdefinedthetwomanganeselensesintoZone1(560ftx30ft=171mx9m)containingup to25%MnwithMn:Feratiosaround1.0and,Zone2(600ftx30ft=183mx9m)containing 16.2%Mnand10.7%Fe.Thetwozonesareseparatedbyapproximately30ft(9m)ofbarren,fault gougematerial.
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Workconsistedofstrippingandtrenching(14trenchestotalling1600ft=488m),3diamonddrill holes(447ft=136m),and4airtracdrillholes(97ft=30m)withsimultaneoussamplingof cuttings.Inaddition,another400tonsofmanganeseorewasminedandaddedtothe1800ton stockpilefromthepreviousyear.Theaveragegradeofthe400tonadditionwas18.8%Mnand 24.2%Fe,whereastheaveragegradeforthe2200tonbulksamplewas22.3%Mnand21.1%Fe. During1990,HollingerinvestigatedandnamedtheAvisonmanganeseshowing(Geofile 23J/15/0290),located1.5miles(2.4km)southeastoftheRuthdepositandalongthesamefault zoneastheRuthandRyandeposits.Workconsistedofgeologicalmappingandsampling,stripping andtrenchingtotalling~150ft(46m),andairtracdrillingtotalling125ft(38m)withconcomitant sampling.Selectedsamplesfromthezonereturnedvaluesofupto42%Mn,whereaschannel samplesfromacrosstheshowingrangedfrom15%to25%Mn.Itslocationalongthesamefault zoneastheRuthandRyandepositswerenoteworthytotheprojectgeologist. AlargepartofHollingerseffortsin1990weredevotedtotheRuthLakedeposit(s).Workincluded detailedgeologicalmapping,trenching,sampling,airtracdrilling(5holes)withconcurrent samplinganddiamonddrilling(21holestotalling2393ft=729m)thatoutlinedtwonewdeposits: RuthBandRuthC.
10.2 LIMEXPLORATIONFROM20052007
10.2.1 2005PROGRAM
InitialexplorationwasconductedoverLIMsLabradorareapropertiesduringthesummerof2005. Theworkconsistedofsurveyingoldworkings(trenches,pitsanddrillholes),prospecting,mapping andcollectingrocksamples.
10.2.2 2006PROGRAM
Thediamonddrillprogramtotalled605metresin11holescompletedbetweenJuly21stand August26thof2006ontheHouston,James,KnobLakeNo.1,andAstrayLakedepositsusing CartwrightDrillingInc.ofGooseBay,Labrador.Also,ashortprogramofbulksamplingwascarried outin2006consistingof188metresoftrenchingforbulksamplingthatwascompletedintwo stages;thefirstattheHoustondeposit(75m)conductedbetweenAugust22ndand24thandthe secondoneatJamesdeposit(113m). AsummaryofthedrillingprogramisgiveninSection13.Asummaryofthebulksamplingand trenchsamplingof2006isshowninTable5fortheHoustonDeposit.
10.2.3 2007PROGRAM
Theexplorationprogramfor2007operatedfromSeptember20thuntilOctober5thandcomprised prospectingandtrenching.
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Table5 TrenchSampleResultsHouston1Deposit From(m) To(m) Len(m) 0.00 26.00 26.00 26.00 50.00 24.00 50.00 69.00 19.00 69.00 75.00 6.00 Fe% SiO2% OreType 66.14 1.39 NB 60.50 6.82 NBY 59.26 11.57 LNB 44.52 34.07 TRX
10.3 2008AND2009EXPLORATION
LIMcontinueditsexplorationprogramonthepropertiesintheScheffervilleareaduring2008and 2009.
10.3.1 2008PROGRAM
Inadditiontothedrillingprogram,LIMselectedEagleMappingLtdofPortCoquitlam,BCtocarry outanaerialtopographicsurveyflownoveritspropertiesintheScheffervilleArea,includingthe Houstonproperty.Thesurveycoveredanareaof16,230haand233,825haatmapscalesof 1:1,000and1:5,000respectively.UsingadifferentialGPS(withanaccuracywithin40cm),LIM surveyedthe2008RCdrillholes,aswellasthetrenchesandatotalof90oldIOCRCdrillhole collarsthatwerestillvisibleandcouldbelocated. AbulksamplingprogramwascarriedoutwithmaterialfromtheHoustonaswellastheJames, RedmondandKnobLakedeposits.Atotalof2,000tonnesofblueorewasexcavatedfromthe Houstondepositaswellas1,400tonnesofblueorefromtheJamesSouthdeposit,1,500tonnesof blueorefromtheRedmond5depositand1,100tonnesofredorefromtheKnobLakedeposit. ThematerialwasexcavatedwithaT330backhoeand/ora950Gfrontendloaderandloadedinto 25tondumptrucksfortransporttotheirindividualstockpilesattheSilverYardareawherethe crushingandscreeningactivitieswerecarriedout.Thesampleswerecrushedandscreenedto producetwoproducts:

LumpOre(50mm+6mm) SinterFines(6mm)
Representativesamplesof200kgofeachraworetypewerecollectedandsenttoSGSLakefield laboratoriesformetallurgicaltestworkandassays.Representativesamplesof2kgofeachproduct werecollectedandsenttoSGSLakefieldlaboratoriesforassays.Othersampleswerecollectedfor additionalscreeningtests.FivetraincarswereusedforthetransportofthesamplestoSeptles, therestofthesamplematerialremainsattheSilverYard.
10.3.2 2009PROGRAM
Inadditiontothedrillingprogram,LIMcompletedthesurveythe2009RCdrillholes,trenchesas wellasanyoldIOCRCdrillholesusingadifferentialGPS. The2009HoustontrenchingprogramwasfocusedontheHouston3deposit,completing479 metresin9trenches.
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Therecentexplorationprogramswereintendedtoconfirmandvalidatethehistoricresources reportedbyIOCandtomakethemNI43101compliant.AppendixIlistsdrillholesandtrenches completedbyLIMbetween2006and2009.
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11. DRILLING(ITEM13)
DiamonddrillingoftheScheffervilleirondepositshasbeenhistoricallychallenginginthatthe alternatinghardandsoftorezonestendtoprecludegoodcorerecovery.TraditionallyIOCuseda combinationofreversecirculation(RC)drilling,diamonddrillingandtrenchingtogeneratedatafor reserveandresourcecalculation.AlargenumberoforiginalIOCdatahavebeenrecoveredand reviewedbyLIMandareincludedinthedatabasethatisusedfortheestimationofresources. LIMcarriedoutexplorationdrillingprogramsin2006,2008and2009. In2006,253metresin5holesBQsizediamondcoredrillingweredrilledintheHoustonproperty usingCartwrightDrillingInc.ofGooseBay,ofwhichonly1drillholewassuccessfullycompleted. In2008and2009,LIMusedAckerRCtriconedrillrigsCaboDrillingusing75mm(27/8inch) diameterrods.ThedrillrigsweremountedonFlexTracNodwellcarriersorskidsandoutfitted withsamplecyclones. In2008,11RCdrillholesweredrilledinHoustonforatotalof791metres. In200946RCdrillholeswerecompletedatHoustonforatotalof3,136metres. Table6summarizesLIMsdrillingprograms. Table6 HoustonDrillingPrograms Type Holes DD RC RC 5 11 46
Year 2006 2008 2009
Length(m) 253 791 3,136
DDDiamonddrill,RCreversecirculation
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12. SAMPLINGMETHODANDAPPROACH(ITEM14)
DuringthetimethatIOCoperatedinthearea,samplingoftheexplorationtargetswerebytrenches andtestpitsaswellasbydrilling.Inthetestpitsandtrenchesgeologicalmappingdeterminedthe lithologiesandthesamplesweretakenover10feet(3.0metres).Theresultswereplottedon verticalcrosssections.Nofurtherinformationwasprovidedregardingthesamplingprocedures followedbyIOCbutverbalinformationfromconsultants,formerIOCemployeesandothers suggeststhattheproceduresusedbyLIMweresimilartoIOCsduringitsactivitiesinthe Scheffervillearea. LIMfollowedindustrysamplingstandardsandprotocolsforexploration.Sealedboxesandsample bagswerehandledbyauthorizedpersonnelandsenttothepreparationlabinSchefferville.RC samplingwasdoneonsiteatthedrillsiteandatthepreparationlaboratoryinSchefferville. LoggingwascarriedoutatthepreparationlaboratoryinScheffervillebyLIMgeologists. Samplesobtainedduringthe2008and2009programswerepreparedinthesamplepreparation laboratoryinstalledinScheffervillebyLIM. ThesamplingproceduresoutlinedbelowweredesignedandformulatedbySGSGeostat. TheentirelengthsoftheRCdrillholesweresampled.TheaveragelengthoftheRCsampleswas metres.Adescriptionofthecuttingswasmadeateverymetredrilled.Arepresentativesamplewas collectedandplacedinplasticchiptraysforeverymetredrilled.Thechiptrayswerelabelledwith HoleIDandtheintervalrepresentedineachcompartment.Themetresdrilledwithnorecovery weremarkedwithanXinsidethechiptraycompartment.
12.1 RCSAMPLESIZEREDUCTION(2008)
InordertoreducethesizeofthesampleattheRCdrillsitetoapproximately7.5kg,thedrill cuttingsweresplit4waysafterleavingthecyclone,duringthe2008drillingprogram. Thecuttingsfromthreeoftheexitportswerediscardedandthecuttingsfromthefourthexitwere collectedina5gallonbuckets.AspartoftheQA/QCprogramthecuttingsfromthreeofthefour exitswereroutinelysampled. SamplesweretakenbytruckdirectlytothepreparationlabinScheffervilleundersupervisionof SGSGeostat.UponarrivalatthePreparationLab,samplescameunderthecareofSGSGeostat personnel.
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Figure4RCSizeReductionandSamplingMethod (usedinthe2008drillingProgram)
12.2 ROTARYSPLITTERRCSAMPLESIZEREDUCTION(2009)
Inthe2009RCdrillprogram,drillcuttingsweresplitwitharotarysplittermounteddirectlyunder thecyclone.TheRotarysplitterisdividedintopieshapespacesandisequippedwithahydraulic motor.Thespeedoftherotationofthesplitterandtheclosingofthepieshapespaceswassetin ordertohavea7.510kgsamplefromthe3metrerodsample.Cuttingsfromtheremaining materialwerediscardedonsite.AspartoftheQA/QCprogramthecuttingsfromtheremaining discardedmaterialwereroutinelysampled. UponarrivalattheSamplePreparationLabinSchefferville,samplescameunderthecareofLIM personnel.Theuseoftherotarysplittersamplingsystemdemonstratedefficacy,thereforeLIM decidedtocontinueitsuseinfutureprograms.
12.3 2006,2008AND2009TRENCHSAMPLING
In2006,2008and2009trencheswereduginseveralpropertiesforresourceestimationsandore bodysurfacedefinition.ThetrencheswereexcavatedwithaCaterpillar330excavatorwitha3 yardbucket.Theexcavatorwasabletodiga1metrewidetrenchwithdepthsdownto3metres, whichwasenoughtopenetratetheoverburden. Trenchesweresampledon3metreintervalswiththesampleconsideredtoberepresentativeof themineralcontentoverthatinterval.Aftercleaningofftheexposure,sampleswerecollectedfrom thesidesoftrenches.Sampleswerecollectedwithasmallrockpickalongalinedesignatedbythe supervisinggeologist.Inmostcasesthematerialsampledwassoftandfriable. LIMcompletedatotalof554metresoftrenchingin10trenchesbetween2006and2009at Houstonandcollectedatotalof135samples.
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13. SAMPLEPREPARATION,ANALYSISANDSECURITY(ITEM15)
Thestandardizedproceduresforthepreparationandreductionofsamplescollectedduringthe 2008and2009RCdrillingcampaignwerepreparedbySGSGeostatandadoptedbyLIMforits samplepreparationlaboratoryinSchefferville. SGSGeostatwerenotinpossessionoftheexactsamplingprocedurescarriedouthistoricallybyIOC butverbalinformationfromformeremployeesanddrillers,suggeststhatthedescribedprocedures issimilartothatusedbyIOCduringtheiractivitiesinSchefferville. Therelevantsampleresultsandsamplecompositesusedfortheresourcesestimationaredescribed insection19.
13.1 SAMPLEPREPARATIONANDSIZEREDUCTIONINSCHEFFERVILLE
13.1.1 2008
SamplepreparationandreductionwasdoneatLIMspreparationlabinScheffervillewhichwas operatedbySGSGeostatpersonnel.Inadditiontothepreparationlabpersonnel,SGSGeostatalso providedageologistandtwogeotechnicianstoperformsamplingdutiesononeofthetworigs utilizedforthedrillprogram.Thisprocedurewasimplementedinordertofacilitatetheshipping andanalysistotheSGSLakefieldlaboratoryinOntario. Themajorityofsampleshaveawidthof3metres,equaltothelengthofthedrillrods.Assoonas samplesweredeliveredtotheScheffervillepreparationlaboratory,theyfellunderthe responsibilityofSGSGeostat.ThesamplingproceduresweredesignedandformulatedbySGS Geostat.TheseprocedureswerefollowedinthepreparationlaboratoryofSchefferville,Quebec. NotethatsamplesobtainedfromRCdrillswerewet.Allsamplesweredriedandreducedcorrectly foranalysesandthensenttoSGSLakefieldinOntario.
13.1.2 2009
The2008procedureswereadoptedin2009forsamplepreparationandsamplereductionandwere carriedoutbyLIMinitssamplepreparationlaboratoryinSchefferville.LIMhadalabsupervisor andwelltrainedgeotechnicianstoperformthesamplingdutiesonthetworigsutilizedforthedrill program.Somelaterimprovementsweremadetotheproceduresbutoveralltheyfollowed guidelinesdevelopedbySGSin2008.Allsamplesweredriedandreducedpriortoshipmentfor analysesatActlabsinAncaster,Ontario.
13.2 ARRANGEMENTOFSAMPLESATTHESCHEFFERVILLEPREPARATIONLABORATORY
Allsamplebagsthatarrivedinthepreparationlaboratoryweredisplayedinasequentialand orderedwayinadesignatedarea.
13.2.1 2008AND2009SAMPLEPREPARATION
Attheendofeveryshift,thesamplersandgeologistdeliveredthesamplestothepreparation laboratory.SamplebagswereplacedinsequentialorderonadrainingtableandaSampleDrop Offformwascompletednotingthedate,time,person,numberofsamplesandsamplesequence.
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Thesebagswereleftovernight,sothatthefinematerialcouldsettletothebottomofthesample bag. Afterleavingthesamplesfor12hours,excesswaterwasdrainedout.Samplebagswerethen emptiedintometalpansandsampleswerespreaduniformly.Eachsamplewasweighedwet,and theweightaswellasthesamplenumberwasrecordedonthedryingform.Themetalpanswere placedinovensinasequentialandorderlyway.Adryingformwasfilledoutwheneachsamplewas placedintheoven.Thesampleswereallowedtodryandcooldownbeforebeingweigheddry.
13.2.2 SAMPLESIZEREDUCTION
Twosetsofrifflesplitterwereusedinregardsofsamplessizes.Theywerecleanedandingood conditioneachtimetheywereused.Eachsamplebagswasputinthesplitterandpassedthrough therifflesplitter4timesbeforereduction,toensureagoodhomogeneityafterthesplitting,the rejectswereputinasamplebagthatwaskeptonsiteasawitnesssample.Theanalyticalsplitwas putinanewlabelledsamplebagwiththesameinitialnumber.Allwitnesssamplebagswere retainedinasecuresiteinScheffervilleforfuturereferenceandassay,ifneeded.Theanalytical splitsamplebagsweresenttoSGSLakefieldortoActlabsforanalysis. Figure5 RiffleSplittingProcedure
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13.3 SAMPLEPREPARATIONATSGSLAKEFIELDLABORATORY
ThefollowingisatabletakenfromtheSGSGeostatreport,describingtheRCdrillholesample preparationprotocolsusedattheSGSLakefieldlaboratoryfacilityinLakefield,Ontario. Table7 SGSLakefieldSamplePreparationMethodology Methodology Parameter MetPlant/Controlqualityassays notsuitableforcommercialexchange PRP89 Crushupto3kgofsampleto75%passing9mesh(2mm) Pulverizeupto250gofrifflesplitsampleto200mesh(75m)
13.4 SAMPLEANALYSESATSGSLAKEFIELD
Allofthe2008RCdrillingandtrenchingprogramweresentforanalysistotheSGSLakefield LaboratoryinLakefield,Ontario,Canada.TheanalysisusedwasBoratefusionwholerockXRF(X RayFluorescence).Thefollowingisadescriptionoftheexplorationdrillholeanalysisprotocols usedattheSGSLakefieldlaboratoryfacilityinLakefield,Ontario.Thisdescriptionwasgivenby SGSLakefield.
o o
o o o o
XRayFluorescenceAnalysisCode:XRF76Z Parametersmeasured,units:SiO2,Al2O3,Fe2O3,MgO,CaO,Na2O,K2O,P2O5,MnO,TiO2,Cr2O3,Ni, Co,La2O3,Ce2O3,Nd2O3,Pr2O3,Sm2O3,BaO,SrO,ZrO2,HfO2,Y2O3,Nb2O5,ThO2,U3O8,SnO2,WO3, Ta2O5,LOI;% Typicalsamplesize:0.2to0.5g Typeofsampleapplicable(media):Rocks,oxideoresandconcentrates. Methodofanalysisused:ThediskspecimenisanalyzedbyWDXRFspectrometry. Datareductionby:Theresultsareexportedviacomputer,online,datafedtotheLaboratory InformationManagementSystemwithsecureaudittrail. CorrectionsfordilutionandsummationwiththeLOIaremadepriortoreporting. Table8 BorateFusionWholeRockXRFReportingLimits Limit(%) Element Limit(%) Element Limit(%) Element SiO2 0.01 Na2O 0.01 CaO 0.01 Al2O3 0.01 FetotalasFe2O3 0.01 P2O5 0.01 TiO2 Cr2O3 V2O5 0.01 0.01 0.01 MgO K2O MnO 0.01 0.01 0.01
AlsoincludesLossonIgnition
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13.5 SAMPLEPREPARATIONATACTLABS
Duringthe2009explorationprogrammealltrenchandRCdrillsampleswereshippedtoActivation Laboratories(ACTLABS)facilityinAncaster,Ontario.Trenchsamplesweretakentothe preparationlabinScheffervilleattheendoftheday.Thetrenchsampleswerenotpreparedinthe samewayasRCdrillsamples,beingjustbaggedandshippedtotheanalyticallaboratory. Asaroutinepracticewithrockandcoresamples,ACTLABSensuredtheentiresamplewascrushed toanominalminus10mesh(1.7mm),mechanicallysplit(riffled)toobtainarepresentative sample,andthenpulverizedtoatleast95%minus150mesh(105microns).Alloftheirsteelmills arenowmildsteel,anddonotinduceCrorNicontamination.Asaroutinepractice,ACTLABS automaticallyusedcleanersandbetweeneachsampleatnocosttothecustomer. Qualityofcrushingandpulverizationisroutinelycheckedaspartoftheirqualityassurance program.Randomizationofsamplesinlargerorders(>100)providesanexcellentmeansto monitordataforsystematicerrors.Thedataisresortedafteranalysisaccordingtosamplenumber. Thefollowingisatabledescribingtherock,coreanddrillcuttingssamplepreparationprotocols usedattheACTLABS. Table9 Rock,CoreandDrillCuttingsSamplePreparationProtocolsACTLABS Rock,CoreandDrillCuttings codeRX1 codeRX1 Terminator codeRX1+500 codeRX1+800 codeRX1+1.3 codeRX2 codeRX3 codeRX4 codeRX5 codeRX6 codeRX7 codeRX8 codeRX9 codeRX10 codeRX11 FollowingtableshowsthePulverizationContaminantsthatareaddedbyACTLABS. crush(<5kg)upto75%passing2mm,split(250g),andpulverize (hardenedsteel)to95%passing105 crush(<5kg)upto90%passing2mm,split(250g),andpulverize (hardenedsteel)to95%passing105 500gramspulverized 800gramspulverized 1.3kgpulverized crush(<5kg),splitandpulverizewithmildsteel(100g)(bestforlow i i ) oversizechargeperkilogramforcrushing pulverizationonly(mildsteel)coarsepulporcrushedrock)(<800g) pulverizeceramic(100g) handpulverizesmallsamples(agatemortar&pestle) crushandsplit(<5kg) samplepreponlysurcharge,noanalyses compositing(percomposite)dryweight drydrillcuttingsinplasticbags checkingqualityofpulpsorrejects
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Table10 PulverizationContaminantsthatareAddedbyACTLABS MillType ContaminantAdded MildSteel(bestchoice) HardenedSteel Ceramic TungstenCarbide Agate Fe(upto0.2%) Fe(upto0.2%).Cr(upto200ppm),traceNi,Si,Mn,andC Al(upto0.2%),Ba,TraceREE W(upto0.1%),Co,C,Ta,Nb,Ti Si(upto0.3%),Al,Na,Fe,K,Ca,Mg,Pb
13.6 SAMPLEANALYSISATACTLABS
FollowingisadescriptionoftheexplorationanalysisprotocolsusedattheActlabsfacilityin Ancaster,Ontario.
13.6.1 XRAYFLUORESCENCEANALYSISCODE:4C
Tominimizethematrixeffectsofthesamples,theheavyabsorberfusiontechniqueofNorrishand Hutton(1969,Geochim.Cosmochim.Acta,volume33,pp.431453)areusedformajorelement oxide)analysis.Priortofusion,thelossonignition(LOI),whichincludesH2O+,CO2,Sandother volatiles,canbedeterminedfromtheweightlossafterroastingthesampleat1050Cfor2hours. Thefusiondiskismadebymixinga0.5gequivalentoftheroastedsamplewith6.5gofa combinationoflithiummetaborateandlithiumtetraboratewithlithiumbromideasareleasing agent.SamplesarefusedinPtcruciblesusinganAFTfluxerandautomaticallypouredintoPtmolds forcasting.SamplesareanalyzedonaPanalyticalAxiosAdvancedXRF.Theintensitiesarethen measuredandtheconcentrationsarecalculatedagainstthestandardG16providedbyDr.K. NorrishofCSIRO,Australia.Matrixcorrectionsweredonebyusingtheoxidealphainfluence coefficientsprovidedalsobyK.Norrish.Ingeneral,thelimitofdetectionisabout0.01wt%formost oftheelements.
13.6.2 ELEMENTSANALYZED
SiO2Al203Fe2O3(T)MnOMgOCaONa2OK2OTiO2P2O5Cr2O3,LOI
13.6.3 CODE4COXIDESANDDETECTIONLIMITS(%)
ThefollowingtableshowstheCode4COxidesandDetectionLimits(%)
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Table11 Code4COxidesandDetectionLimits(%) Oxide DetectionLimit SiO2 0.01 TiO2 0.01 Al2O3 0.01 Fe2O3 0.01 MnO 0.001 MgO 0.01 CaO 0.01 Na2O 0.01 K2O 0.01 P2O5 0.01 Cr2O3 0.01 LOI 0.01
13.7 SAMPLESECURITYANDCONTROL
13.7.1 LIMSAMPLEQUALITYASSURANCE,QUALITYCONTROLANDSECURITY
LIMinitiatedaqualityassuranceandqualitycontrolprotocolforits2008RC,DDH,andtrench samplingprogram,whichalsowasappliedforits2009program.Theprocedureincludedthe systematicadditionofblanks,fieldduplicates,preparationlabduplicatestoapproximatelyeach25 batchsamplessentforanalysisatSGSLakefield. ThesealedsamplebagswerehandledbyauthorizedpersonnelfromLIMandSGSGeostatandsent tothepreparationlabinSchefferville.Authorizedpersonneldidtheloggingandsamplinginthe securedandguardedpreparationlab. Eachsamplewastransportedbacktothepreparationlabwithatruckattheendofeachshiftbythe labsupervisoronaregularbasis.ThesamplesweretransportedtothelabnearSchefferville,a warehousefacilityrentedbyLIM.Thelabwaslockeddownduringthenight.Samplebatcheswere sealedandsentbytrainorbyexpressmail(plane).Traceabilitywaspresentthroughoutthe shipmenttoLakefield.
13.7.1.1 FieldDuplicates
Theprocedureincludedthesystematicadditionoffieldduplicatestoapproximatelyeach25batch samplessentforanalysistothelab.Thecuttingsfromthesecondandthirdexitswereroutinely sampledevery25thbatch.The24thsamplewascollectedatexit2.The26thsamplewascollected atexit3.Thesesampleswentthroughthesamesamplepreparation,analysisandsecurity proceduresandprotocolsastheregular3metresamplescollectedfromtheexit1.ThisQA/QC procedureenabledSGSanybiasintheRCsamplingprogramtobeverified.
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13.7.1.2 PreparationLab Duplicates

Theprocedureincludedthesystematicadditionofpreparationlabduplicatestoapproximately eachbatchof25samplessentforanalysisatSGSLakefield.Asecondportionofcuttingsfromthe firstexitsizereductionprocedurewasroutinelysampledevery25batchsimilarlyasdescribed above.
13.7.1.3 Blanks
BlanksampleswerecreatedonsiteinScheffervillefrombarrenslateslocatedsoutheastofthe town.Theseblankswereusedtocheckforpossiblecontaminationinlaboratories.Someweresent toSGSLakefieldandotherstoCoremandALSChemexforverificationoftheaveragetenureinthe blanks.Blanksampleswereintroducedevery50samplebatch.
13.7.2 SGSLAKEFIELDSAMPLEQUALITYASSURANCE,QUALITYCONTROLANDSECURITY
Thefollowingisadescriptionofthequalityassuranceandqualitycontrolprotocolsusedatthe SGSLakefieldlaboratoryfacilityinLakefield,Ontario.ThefollowingdescriptionwasgivenbySGS Lakefield.
13.7.2.1 Qualitycontrol
Oneblank,oneduplicateandamatrixsuitablecertifiedorinhousereferencematerialperbatchof 20samples. Thedataapprovalstepsareshowninthefollowingtable. Table12 SGSLakefieldLaboratoryDataApprovalSteps ApprovalCriteria Step 1.Sumofoxides 2.Batchreagentblank 3.Insertedweighedreferencematerial 4.WeighedLabDuplicates Majors98101% 2xLOQ StatisticalControlLimits StatisticalControlLimitsbyRange
13.7.3 ACTLABSAMPLEQUALITYASSURANCE,QUALITYCONTROLANDSECURITY
Followingisadescriptionofthequalityassuranceandqualitycontrolprotocolsusedatthe ACTLABSfacility.ThisdescriptionisbasedoninputfromACTLABS. Atotalof34standardsareusedinthecalibrationofthemethodand28standardsarechecked weeklytoensurethattherearenoproblemswiththecalibration. CertifiedStandardReferenceMaterials(CSRM)areusedandthestandardsthatarereportedtothe clientvarydependingontheconcentrationrangeofthesamples. Therechecksaredonebycheckingthesamplesoxidetotal.Ifthetotalislessthan98%the samplesarereweighed,fusedandran.Thedataiscomparedtotheoriginalresults.Sometimes therearebadfusionsorLOIneedstoberepeated.
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TheamountofduplicatesdoneisdecidedbythePrepDepartment,theirprocedureisforevery50 samplesonlyifthereisadequatematerial.Iftheworkorderisover100samplestheywillpick duplicatesevery30samples. GeneralQCprocedureforXRFis:Thestandardsarecheckedbycontrolchartingtheelements.The repeatsandpulpduplicatesarecheckedbyusingastatisticalprogramwhichhighlightsanysample thatfailtheassignedcriteria.Theseresultsareanalyzedandanyfailuresareinvestigatedusingour QCPNonConformance(errororomissionmadethatwasincontrastwithatestmethod(QOP), QualityControlMethod(QCP)orQualityAdministrativeMethod(QAP).
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14. DATAVERIFICATION(ITEM16)
14.1 QAQCPROCEDURESANDPROTOCOLS
Thedataverificationoftheiron(Fe),phosphorus(P),manganese(Mn),silica(SiO2)andalumina (Al2O3)valueswasdonewiththeassayresultsfromthe2008RCdrillingprogram.SGSGeostat introducedaseriesofqualitycontrolproceduresincludingtheadditionofpreparationlab duplicates,exit2duplicates,exit3duplicatesandblanksasexplainedinSection15.7. SGSGeostatsupervisedtheRCsamplingin2008whenatotalof166exitduplicatesweretakenand analyzed.Resultsshowthatassayvaluesarepreciseanddependable.Thesequalitycontrolresults permittedSGSGeostattoconfirmthepresenceandcontentofiron(Fe),phosphorus(P), manganese(Mn),silica(SiO2)andalumina(Al2O3)ofallQA/QCsamples,aswellastheintegrityof thesampleresultsusedintheresourceestimationofJames,Redmond2BandRedmond5,(andin thefutureforHouston1andHouston2)mineraldeposits.SeeFigure6and7. Figure6 FeAssayCorrelationbetweenOriginalandExit2DuplicateSamples
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Figure7 SiO2AssayCorrelationbetweenOriginalandExit2DuplicateSamples
14.2 ASSAYCORRELATIONOFTWINNEDHOLES
Thedataverificationwasdoneontheiron(Fe)andsilica(SiO2)assayresultsfromtheIOC historicalRCdrillresultsandthe20082009RCdrillingprogramsresults.LIMtwinnedsomeIOC RCholesinordertoverifytheiron(Fe)content.Atotalof4pairedRCholes(8intotal)from Houstonwereconsidered.Correlationcoefficientsshowedadequatecorrelation.RefertoFigures8 and9. Visualanalysesoftheselectedpairsalsoshowsatisfactorycorrelation.Aholeshowedlower correlationduetolowgradeorelayerswithintheorebodyandsharpchangesbecauseofthe structuralcomplexity(Figure10).
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Figure8 GraphicofFeAssayCorrelationofTwinnedHoles
80
70
60
50
Fe%(IOC)
40 FE%
30
20
10
0 0 10 20 30 40 50 60 70 80
Fe%(LIM)
Figure9 GraphicofSiO2AssayCorrelationofTwinnedHoles
60
50
40
SiO2%(IOC)
30 SIO2% 20
10
0 0 10 20 30 40 50 60 70
SiO2%(LIM)
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Figure10 VisualcomparisonofFegradesof4pairsofholes
14.3 BLANKS
Atotalof60blanksampleswereusedtocheckforpossiblecontaminationinlaboratories.SGS GeostatmadetheblanksamplefromaknownslateoutcroplocatednearSchefferville.SGSGeostat homogenizedanaverage200kgofmaterialonsiteatthepreparationlabinSchefferville.LIMand SGSGeostatalsosenttwoseparatebatchesoffifteen(15)blanksamplestotheCoremandALS ChemexindependentlaboratoriesofVancouverandQuebecCity,respectively,foranalysis. Anaverage4.82%Feand61.96%SiO2wasnotedfortheentirebatchof60blanksamples.ForSGS Lakefield,anaverageof5.37%Feand61.40%SiO2wasnoted.ForALSChemex,anaverageof 4.22%Feand62.60%SiO2wasnoted.ForCOREM,anaverageof4.34%Feand62.25%SiO2was noted.
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15. ADJACENTPROPERTIES(ITEM17)
AdjacenttothepropertiesownedbyLIMinLabradorareotherformeroperationsofIOCin LabradorandQuebecthatwereeitherminedoutorabandonedbyIOCin1982.IOCproducedan approximatetotalofsome150milliontonsofdirectshippingironorefromalltheirpropertiesin QuebecandLabradorduringtheoperatingyearsof1954to1982. IOCiscurrentlyoperatingthe CarolLakeironpropertysome200kmsouthofScheffervillenearLabradorCityinLabrador. Afterclosure,previouslyownedIOCoperationsinLabradorhaverevertedtotheCrown,whilethe miningleasesinQuebecremainedwiththeunderlyingowner,Hollinger.Currently,LIMandNML holdtitletomostofthedepositsabandonedinLabrador.AwhollyownsubsidiaryofLabradorIron MinesHoldingsLimitedhasrecentlyenteredintoanumberofagreementsgivingitownershipof 214claimsandminingleasesinQuebeccontaininganumberoftheseironandmanganesedeposits withatotalhistoricresourceof50milliontonsbasedontheIOC1983reservebook. AfeasibilitystudyhasbeencarriedoutforNMLonanirondepositintheHowellsRiverareaof LabradorknownastheLabMagPropertylocatedsome30kmnorthwestofSchefferville.The propertyisownedbythepartnershipofNewMillenniumCapitalCorp.andtheNaskapiLabMag Trust.NMLpublishedaPrefeasibilityStudyinApril2009onaDSOProjectonsomeoftheirclaims inLabradorandQuebecandiscurrentlypreparingafeasibilitystudytodevelopthesameproject. TheMontWrightminingcomplex(ownedbyArcelorMittal)aswellastheWabushminesare locatedinthesameareanearWabushandFermontinQuebec.An8to16Mtpaironoperationat theBloomLakedeposit,locatedeastoftheofMontWrightoperation,nearLabradorCity,is currentlyunderconstructionbyConsolidatedThompsonMines.
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16. MINERALPROCESSINGANDMETALLURGICALTESTING (ITEM18)

16.1 LAKEFIELDRESEARCHLABORATORIES
DuringFebruary1989threemineralizedsamplescomprisingapproximately12.7tonnesor45 drumsofJamesoreweretreatedatLakefieldResearchLaboratories(nowSGSLakefield),Lakefield, Ontario.ThistestworkprogramwassupervisedbyW.R.HatchEngineeringLtd.(Hatch)of Ontario,andtheresultsweredetailedinthereportentitled"WetSpiralClassificationofIronOres" forLaFosse,datedMarch61989.Descriptionsofthetestsamplesarenotavailable;however,the averageheadgradeof62.1%Feand10.1%silicawasabout3.5unitshigherinironand0.9units lowerinsilicathantheIOCestimatedaverageintheJamesdeposit. Thesampleswerecrushedto100%1inches(in)andscreenedatin.TheLumpOreproduct( 1intoin)wasweightedandassayedandtheinwashfeedwasweighedandfedata controlledratetoawashingcircuit.Thewashingprocessincludedarotaryscrubber(millwithout grindingmedia)andaspiralclassifier.Thespiralclassifierfinesoverflowandsandsproductswere collectedandanalyzed.TheLakefieldtestresultsaresummarizedinTable13. Table13 LakefieldWashingTestResults Sample#1 Head Lump(1/1/2+1/2) Fines(1/2) Tails(100mesh=150m) Calc.Head Sample#2 Head Lump(1/1/2+1/2) Fines(1/2) Tails(100mesh=150m) Calc.Head Sample#3 Head Lump(1/1/2+1/2) Fines(1/2) Tails(100mesh=150m) Calc.Head Wt% Fe% Silica% 100 10.3 53.1 36.9 100.3 100 13.8 65.0 23.7 102.7 100 6.7 62.2 31.0 100.0 67.8 65.5 68.3 67.3 67.6 59.4 58.9 65.3 37.2 57.9 59.1 62.4 65.3 46.0 59.1 2.2 6.1 2.3 0.9 2.2 13.6 9.7 5.88 35.6 13.3 14.6 9.5 5.9 33.2 14.6
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ThewashingresultswereusedtoevaluatetheJamesdepositmineralizationaspartoftheopenpit evaluation.ThewashingresultsprovidedanindicationoftheLump,FinesandTailingsproducts quality.Plottingthefeedironandsilicagraderelationshipofthethreesamplesonscatterdiagram establishedfromtheIOCsamplepopulation,alltestsamplepointswereabovethetrendlinewhich indicatesatypeofmineralizationcontaininghighironandlowsilica.Whencomparingthetest samplestotheblockmodeldata,itbecomesapparentthatitwouldbedesirabletotest representativesamplescontaininglowerirongradessothattheupgradingpotentialcanbe assessed.Hatchconcludedthatatlowsilicacontent(68%ironand2.3%silica)onlyminor upgradingoccurred.Fortherelativelyhighsilicasamples(57.7%to59.7%Feand15.6%to14.0% silica),silicaconcentratedintofinesoverflow(tailings),resultinginupgradingthesandsfraction withrespecttoiron.
16.2 MIDREXTESTS
MidrexTechnologies,Inc.(Midrex)isaninternationalironandsteelmakingtechnologycompany basedinCharlotte,NorthCarolina.In1989Midrexsampledandtestedlumporesamples#632 fromJames,#620fromSawyerLakedepositand#625fromHouston1depositforstandardraw materialevaluationpurposes.ThesampleanalysesarepresentedinTable14. Table14 MidrexLumpOreSamplesAnalyses DryWt%Yieldat S% Fe% Sample# +6.7mm 632/James 82.16 67.95 0.003 620/Sawyer 90.50 68.57 0.003 625/Houston1 92.33 68.32 0.007 AlllumporesampleswereestimatedbyMidrextobesuitableforcommercialproductionusingits technology.
P% 0.016 0.011 0.057
16.3 CENTREDERECHERCHESMINRALES(1990)
In1990,abulksampleofmineralizedmaterialfromtheJamesdepositweighingapproximately threetonneswastransportedtoCentredeRecherchesMinerales(CdRM),QuebecCity,fortesting, onbehalfofLaFossePlatinumGroupInc.Thismaterialwascrushedto1in,whichwasfinerthan theLakefieldtests,andwetscreenedatin.Theresultsfromthescreentestsonthisbulksample aresummarizedinTable15.
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Table15 JamesBulkSampleScreenAnalysis(CRM) SizeFraction kg Wt% Wt% Samplereceived 3,121 100 +2"rejected 227 7.3% Total1" 2,862 91.7% 100 2,340 75.0% 81.8% 1"to+" 398 12.8% 13.9% " Assumedfines 124 4.0% 4.3% InadditiontotheJamesbulksample,asamplefromSawyerLakewassubmittedfortesting.The resultsofthescreeningandsizefractionassaysarepresentedinTable16. Table16 SawyerLakeSampleScreenandChemicalAnalysis(CRM) SizeFraction 1"to+" "to100# 100#to200# 200# 100# Calc.Feed FeedAssay wt% 21.5 48.9 1.3 28.3 29.6 100.0 65.0 Fe% 68.2 66.2 51.4 62.6 62.1 65.4 4.97 SiO2 0.97 3.27 28.1 27.1 27.1 4.85 Al2O3 0.13 0.17 Mn 0.56 0.84 P 127 146
16.4 2006BULKSAMPLINGBYLIM
BulksamplesfromtrenchesattheJamesandHoustondepositswerecollectedduringthesummer of2006fromtwotrenches113metresand78metreslongrespectively.Threebulksamplesof some400kgeachwerecollectedfromtheJamestrenchandfourbulksamplesofsome600kgeach werecollectedfromtheHoustondeposittrenchfortesting.Thetestingforcompressivestrength, crusherindexandabrasionindexweredoneatSGSLakefield.Thecompositecrushing,dryandwet screenanalysis,washingandclassificationtestsweredoneatrpcTheTechnicalSolutions CentreinFredericton,NewBrunswick.Anadditionalfivecompositesamplesfromthedifferentore zonesinthetrenchwerecollectedandtestedintheALSChemexLabinSudburyforchemical testing. Thebulksamplingtestsproduceddataforrockhardnessandworkindicesforcrushingand grinding,averagedensitydataforthevariousorezonesaswellaschemicaldata.Thespecific gravitytests,completedonthebulksamples,haveshownthattherewasapossibilitythatthe averageSGishigherthanthe3.5kg/twhichwasusedintheIOCcalculations.AdditionalSGtesting wascompletedduringthe2009explorationprogram,obtainingaFedependantvariableSG(See Section19.4).
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TheSGdatahavebeenandwillcontinuetobeusedinthecalculationofresourceandreserve volumeswhilethechemicaltestresultswillbeusedtocomparethemwiththehistoricalIOCdata fromneighboringdrillholes.Table17showsthesummaryoftheresultsofthetestsonthe2006 bulksamplesforthevariousoretypes. Table17 SummaryofTestsbySGSLakefield
16.5 SGSLAKEFIELD(2008)
Fromthe2008ExplorationDrillProgram,fiveironorecompositesamplesfromtheJamesdeposit weresubmittedtoSGSLakefieldformineralogicalcharacterizationtoaidwiththemetallurgical beneficiationprogram.Thesampleswereselectedbasedontheirlowerirongrade.Emphasiswas placedontheliberationcharacteristicsoftheironoxidesandthesilicatesminerals. TheoverallliberationoftheFeOxidesisgenerallygoodforeachsample,exceptforsample156037. However,eachsampleshowsslightlydifferentliberationcharacteristicsbysize.Samples156109 and156090haverelativelyconstantliberationthroughoutthesizefractions(~70%to90%per fraction).FeOxideliberationis~60%inthe+1700m,+850mand+300mfractions,but increasesto~80%to90%inthefinerfractionsinsample156032.Liberationisincreased significantlywithdecreasingsizeinsamples160566and156037.Resultsofthetestare summarizedinTable18.
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Table18 ResultsofMineralogicalCharacterizationTests(SGSLakefield)
Sample Hole From To %Fe Size3000+1700m Size1700+850m Size850+300m Size300+150m Size150+75m Size75+3m 156109 160566 156090 156032 156037 RCJM0012008RCJM0012008 RCJM0012008 RCJM0012008 RCJM0012008 Analyzed Polished 30 18 42 45 60 Sections 33 21 45 48 63 51.13 30.10 5.60 12.40 9.50 17.70 24.60 54.48 8.00 5.70 15.40 14.10 13.70 43.00 51.13 23.60 7.00 19.30 7.30 17.30 25.00 51.69 24.90 8.70 13.60 12.20 14.30 26.30 50.08 38.30 12.10 14.70 8.80 7.10 19.00 14 8 8 4 2 2
Otherconclusionsfromthereportinclude: o Mineralreleasecurves:samples160566and156037displaypoorliberationincoarsesize fractions.Apoorqualitycoarseconcentratewithelevatedsilicatelevelsisanticipatedforthese twosamples.Forthefinermaterial(300m)goodliberationmightbeachievedbetween100 mand200m(~80%liberation)withtheexceptionofsample156037; Foreachsample,silicateliberationmightbeachievedinthe300mto400msizerange.It shouldbenoted,thatthisiswheremostofthesilicatesaccumulate; ThegraderecoverychartsforFeandSialsorevealthatsample156037issignificantlydifferent fromanyoftheothersamplesandmightbemoreproblematicforprocessing.
o o
16.6 2008BULKSAMPLINGBYLIM
ABulkSampleprogramwasundertakenduringthesummerof2008.1,000to2,000tonnesamples wereexcavatedwithaCAT330typeexcavatorfromfourofLIMsStage1deposits:JamesSouth deposit(1,400tons),Redmond5deposit(1,500ton),KnobLakedeposit(1,100tond),andHouston deposit(2,000tons).TheexcavatedmaterialwashauledtotheSilverYardareaforcrushingand screening.Therawmaterialwasscreenedatapproximately6mmintotwoproductsalump product(50mm+6mm)andasinterfineproduct(6mm).Thematerialexcavatedfromeach depositandtheproductsproducedfromeachdepositwerekeptseparatefromtheothers. Representative200kgsamplesofeachraworetypewascollectedandsenttoSGSLakefield Laboratoriesformetallurgicaltestsandother(angleofrepose,bulkdensity,moisture,directhead assayandparticlesizeanalysisdeterminations). Preliminaryscrubbertestswereperformedonallfoursamples.OnlytheJamesSouthsamplewas submittedforCrusherWorkIndextests.Thepotentialofbeneficiationbygravitywasexploredby HeavyLiquidSeparation.Vacuumfiltrationtestworkwasalsocarriedout.Theresultsofthebulk sampletestareshowninTables19and20.
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Table19 CalculatedGradesfrom2008BulkSamples(SGSLakefield) Deposit OreType Fe1 SiO2 P1 Al2O3 LOI JamesSouth Knob Houston BlueOre RedOre BlueOre 63.8 58.5 66.1 6.64 7.29 2.22 0.02 0.11 0.07 0.21 1.05 0.30 1.88 8.51 1.33 1CalculatedfromWRAoxides Table20 2008BulkSamplesTestResults(SGSLakefield)
Fe 67.7 64.5 63.3 63.8 58.8 58.3 53.2 57.9 68.1 66.2 63.7 66.2 62.4 61.0 52.1 57.7 Assays% SiO2 Al2O3 P 1.33 0.12 0.013 5.69 26.1 6.29 6.64 5.02 6.49 11.2 11.0 6.22 1.08 3.30 3.84 1.99 2.27 6.54 8.91 31.8 21.2 13.4 0.20 0.15 0.38 0.18 0.69 1.13 1.58 2.40 1.02 0.20 0.41 0.38 0.54 0.37 0.24 0.59 0.39 0.74 0.50 0.020 0.016 0.030 0.018 0.114 0.111 0.110 0.108 0.112 0.060 0.078 0.082 0.089 0.075 0.020 0.021 0.016 0.023 0.021 LOI 1.59 1.95 1.42 2.10 1.75 9.95 8.70 7.89 6.90 9.23 1.00 1.22 1.37 2.17 1.38 3.39 3.16 1.80 2.81 2.99 Distribution Mass 41.1 33.3 13.1 12.5 100.0 60.4 26.0 1.87 11.7 100.0 33.9 35.5 6.43 24.1 100.0 26.5 42.0 12.1 19.5 100.0 JamesSouth(BlueOre) LumpOre 50mm+6.7mm SinterFeed 6.7mm+150m PelletFeed Slimes Calc.Head LumpOre PelletFeed Slimes Calc.Head LumpOre PelletFeed Slimes Calc.Head LumpOre PelletFeed Slimes Calc.Head 38m 50mm+6.7mm
Redmond Blueore 57.8 13.1 0.02 0.32 2.63
150m+38m 50.1
KnobLake(RedOre) SinterFeed 6.7mm+150m 38m 50mm+6.7mm
150m+38m 54.5
Houston(BlueOre) SinterFeed 6.7mm+150m 38m 50mm+6.7mm
150m+38m 65.8
Redmond5(BlueOre) SinterFeed 6.7mm+150m 38m
150m+38m 45.0
ThematerialcollectedfromtheJamesSouthbulksamplewassenttoanumberofother laboratoriesforadditionaltestwork,includingDerrickCorporationforscreeningtests,Outotec,
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andSGALaboratoriesforSinterTestsandLumpOrecharacterization.MaterialfromtheRedmond depositwassenttoMBECoal&MineralsTechnologiesandtoCoreminQuebecCity.
16.7 MANGANESEPROPERTIES
Todate,theonlylaboratorytestingthathasbeencarriedoutonmanganeseorehasbeenonRuth LakeOre.InNovember1988,LakefieldResearchconductedtestworktoinvestigatetherecoveryof coarsemanganese.Workincludedheavyliquidtestsatdifferentgravities.Heavyliquidtestshowed that80%manganeserecoverycouldbeachievedataspecificgravity3.16and31%weightwould berejected.SampleswerenotidentifiedintheLakefieldreportsoitisnotpossibletoconcludehow welltheyrepresenttheRuthLakedeposit. InDecember1989,foursamples(approximately60lbs)weresubmittedtoLakefieldResearchfor mineralogicalanalysis.Severaltypesoftestswerecarriedoutinordertoidentifyphysical separationprocessesthatmaybesuccessfulinrejectingiron(goethite)andupgradingthe manganeseproduct.Selectivecrushing/screening,gravityconcentration,andhigh tension/electromagneticseparationindicatedupgradingonthe6meshmaterialtested.Magnetic separationandwetscrubbingprocessesshowednosignificantupgrading.
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17. MINERALRESOURCEESTIMATION(ITEM19)
17.1 INTRODUCTION
ThemineralresourcespresentedhereinarereportedinaccordancewiththeNationalInstrument 43101andhavebeenestimatedinconformitywithgenerallyacceptedCIMEstimationofMineral ResourceandMineralReservesBestPracticesguidelines.Mineralresourcesarenotmineral reservesanddonothavedemonstratedeconomicviability.Thereisnocertaintythatalloranypart ofthemineralresourcewillbeconvertedintomineralreserve. Priortotheresourcesreportedinthisdocument,theHoustondepositshadhistoricalreserves (noncompliantwithNI43101)ofDSOqualitytotalling9.1Mt@57.4%Feand7.1%SiO2(IOCOre Reserves,1983),whichwasbasedongeologicalinterpretationsoncrosssectionsandcalculations weredonemanually.Itshouldbenotedthatthehistoricalestimatesarebasedoneconomicsof 1983andthatalthoughthegeological,mineralogicalandprocessingdatawillbethesametoday, economicsandmarketconditionshavechanged. TheclassificationusedintheIOCreportsisasfollows: Measured:Theoreismeasuredaccuratelyinthreedimensions.Alldevelopmentandengineering evaluations(economics,oretesting)arecomplete.Thedepositisphysicallyaccessibleandhasa completepitdesign.Thereserveiseconomicandismarketableundercurrentconditions. Indicated:Developmentandengineeringevaluations(economics,oretesting)arecomplete. Depositsinthiscategorydonotmeetallthecriteriaofmeasuredore. Inferred:Onlypreliminarydevelopmentandevaluationarecompleted.Depositsmaynotbe mineablebecauseoflocation,engineeringconsiderations,economicsandquality. Theaboveshownterms,definitionsandclassificationarenotcompliantwithNI43101butwere usedbyIOCfortheirproductionreports.Currentcompliantmineralresourcesarecategorizedon thebasisofthedegreeofconfidenceintheestimateofquantityandgradeorqualityofthedeposit, asfollows:
o o o
Inferredmineralresources, Indicatedmineralresourcesand Measuredmineralresources.
Compliantmineralreservesarethatpartofameasuredmineralresourceorindicatedmineral resourcewhichcanbeextractedlegallyandataprofitundereconomicconditionsthatarespecified andgenerallyacceptedasreasonablebytheminingindustryandwhicharedemonstratedbya preliminaryfeasibilitystudyorfeasibilitystudyasfollows:

o o
Probablemineralreserveand Provenmineralreserve
Houstondatausedfortheestimationofcurrentmineralresourceswasinitiallycompiledand validatedusingMapInfoProfessionalsoftwareincombinationwithEncomDiscoverandMicrosoft
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OfficeAccess.DatawasthenexportedtoGemcomGEMSSoftwareVersion6.2.3,whichwasusedto performthefinalvalidationoftheHoustondatabase,toconstructsolids,tobuildcomposites,torun geostatisticalanalyses,tobuildtheblockmodel,torungradesinterpolationandtoestimate mineralresources. ThedatausedfortheresourceestimationisbasedondataobtainedasofDecember2009andhas beencompiled,collected,managedandverifiedusingindustrysbestpractices.
17.2 DATABASEANDVALIDATION
ThehistoricaldatawasenteredfromIOCsdatabanklistingprintoutsofdrillholes,trenchingand surfaceanalyses.MostcollarcoordinatelocationsofdrillholeswereobtainedusingaTrimbleDGPS withaccuraciesunder30cms.Thelocationsoftheremainingholesandtrenchesaswellasgeology weredigitizedusingMapInfov9.5onhistoricalmapsthatweregeoreferencedusingtheDGPS surveyedpoints.Theestimatedaccuracyofthedigitizeddataisapproximately5metres.Historical crosssectionswerealsodigitizedusingMapInfo/DiscoversoftwarethenimportedintoGemcom GEMS6.2.3. TheHoustondatabasecontainsatotalof8,599metresofdrillingin147holes(includingRCand diamonddrilling),atotalof7,454metresoftrenchingandatotalof5,020samples.Table21 providesasummaryoftheHoustondatabase. Table21 SummaryofHoustondatabase Source Historical LIM(20052009) Thefinalverificationandvalidationofthecollarinformation,downholesurvey,lithology, mineralizationandanalyticaldatawasperformedusingGemcomGEMSvalidationtoolsthat checkedformissingandoverlappingintervalsaswellasconsistencyinlengths.Tothebest knowledgeoftheauthor,alldatausedinthisestimationisaccurate. Type Drillhole Trench Drillhole Trench No. 84 63 Metres 4,418 6,900 4,181 554 Assays 3,571 1,449
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17.3 GEOLOGICALINTERPRETATIONANDMODELING
ThegeologicalandoremodelinterpretationoftheHoustondepositwascompletedconsideringa cutoffgradeof45%Fe+Mn;howevertheresourcesreportedarebasedonacutoffgradeof50% Feforironoreand50%Fe+Mnformanganiferousironore.TheIOCoretypeparametersofNon Bessemer(NB),leannonBessemer(LNB),highsilica(HiSiO2),highmanganiferous(HMN)andlow manganiferous(LMN)wereconsideredfortheresourceestimation.PleaserefertoTable4for details. ThegeologicalmodelingoftheHoustonmineraldepositwasdoneusing90verticalcrosssections withadirectionofN043spacedapproximately30metresapart.Thecrosssectionconfigurationis thesameastheoneusedbyIOC.Fiftytwo(52)availablehistoricalpapercrosssectionsfromIOC weredigitizedandusedforthegeologicalinterpretationandmodeling. Theoriginalgeologicalandoreinterpretationswereupdatedwithinformationobtainedduring recentexplorationprograms.Thesolidswerecreatedfromthesectionalwireframescombining geologicalandmineralizationinterpretation. ThestudyareaoftheHoustondepositincludedinthisreportcoversanextensionof2,680mlongx 450mwideand160mvertical.Infilldrillingwillberequiredtobetterdefinemineralizationinsome areaswithintheorebodysubjectofthisreport.Aremaining2kmsstrikelengthtothesoutheastof underexploredmineralizationwillbesubjecttoaseparatetechnicalreportonceenough explorationworkiscompleted.
17.4 SPECIFICGRAVITY(SG)
TheSGtestingwascarriedoutonreversecirculationdrillchips.TheSGwasobtainedbymeasuring aquantityofchipsinairandthenpouringthechipsintoagraduatedcylindercontaininga measuredamountofwatertodeterminethevolumeofwaterdisplacement.Avolumeofwater equaltotheobserveddisplacementisthenweighedandtheSGofthechipsiscalculatedusingthe equationlistedbelow.
SG = A Ww
SG=SpecificGravityofSample A=WeightofSampleinair(dry) Ww=WeightofWaterdisplaced
Avariablespecificgravity,Fedependant,wasusedfortheresourceestimationwhichwas calculatedusingtheformulabelow. SG(insitu)=[(0.0258*Fe)+2.338]*0.9 TheformulawascalculatedfromregressionanalysesinMSExcelusing229specificgravitytests completedduringthe2009drillingprogram.The0.9factorcorrespondstoasecurityfactortotake intoaccountporosityofanestimatedaverageof10%volume.Thisformulawasvalidatedandused bySGSGeostatinpriortechnicalreports.
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17.5 STATISTICS
CompositesampleswerecalculatedinGEMSatequallengthsof3metresstartingfromthecollars usingFe,Mn,SiO2,Al2O3andPgrades.CompositeswereextractedintoaPointAreaworkspacefor statisticalanalysisandgradeinterpolation. Figures11,12and13showbasicstatisticsofFe,SiO2andMninallsamplesconsideredinthe resourceestimation.
Figure11Frequency,CumulativeFrequencyandNormalDistributionchartofFe
Figure12Frequency,CumulativeFrequencyandNormalDistributionchartofMn
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Figure13Frequency,CumulativeFrequencyandNormalDistributionchartofSiO2
17.6 BLOCKMODELINGANDGRADEESTIMATION
17.6.1 VARIOGRAPHY
3DsemivariogramanalysisinGEMSusingalldataavailableasasingledomain(orebody)was donetodeterminedirectionsofmaximumcontinuityandvariousrangesofinfluence.The informationobtainedfromthevariogramswasusedintheparametersforthesearchellipsesfor gradeestimations. Table22Resultsofthe3Dsemivariogramanalysis
Principal PrincipalDip Intermediate Nugget Azimuth Azimuth 140.675 0 230.675 58.86 Model Spherical Sill X 153.28 Anisotropy Y Z 71.071 68.090 55.302
17.6.2 GRADEESTIMATIONMETHODOLOGY
TheOrdinaryKriginginterpolationmethodwasusedforgradeestimatebyblockmodelingwith blocksizesof5x5x5metresandblockrotationof45.6whichcorrespondstothegeneralstrikeof theHoustondeposit.Theblocksizeconsideredwastobethesmallestestimatedsizeforthistypeof mineralizationtotakeintoaccountsharpgradechangesovershortintervals.
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Table23Parametersoftheblockmodel
NumberofBlocks Columns 130 Rows 580 Levels 45 OriginandOrientation X 651,84 mE Y 6,063,20 mN Z 630.00m Orientation 45.6 BlockSize Columnsize 5m Rowsize 5m Levelsize 5m
Threerockcodeswereusedtoassigntotheblocks.ThesewereAir,OreandWaste.Blockshadto beatleast50%insidetheoresolidmodeltobecodedasOre.Figures14,15and16show examplesofrockcodeassignedasoreinsections344,325and386respectively. Theranges(radiusofinfluence)obtainedfromvariogramanalysissuggestthatthedensityofdata isadequate;however,someareaswillneedadditionaldrillingtoincreaseconfidenceintheresults obtained. Blockgradeestimationwascompletedinfifteen(15)passesusingthreesearchellipsesdefinedby 3Dsemivariogramanalysisforfivegrades(Fe,Mn,SiO2,Al2O3andP).Thethreesearchellipses weredefinedforresourceclassification(measured,indicatedandinferred).Rangesassumedfor searchellipsesGEOS1andGEOS2are20%and35%respectivelyofthemaximumrangeobtained fromvariogramanalysis(GEOS3).Figures17,18and19showresultsoftheFeinterpolationon sections344,325and386.Figure20showsstackedlongsectionsthroughoutthestudiedarea showingresultsofinterpolationforFeandSiO2andwellasclassificationofblocks. Table24Parametersofsearchellipsesusedintheinterpolationofgradesandclassification
Search Ellipse GEOS1 GEOS2 GEOS3 Classification Measured Indicated Inferred Principal Azimuth 140.675 140.675 140.675 PrincipalDip Anisotropy Anisotropy Anisotropy X Y Z 0 0 0 14.20 24.85 71.07 13.60 23.80 68.09 11.06 19.40 55.30
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HoustonDeposit Section344
Figure14Section344ofHouston1with15mcorridoronbothsides
Figure15Section325ofHouston2Swith15mcorridoronbothsides
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Figure16Section386ofHouston3with15mcorridoronbothsides
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Figure17
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Figure18
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Figure19
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Figure20StackedlongsectionslookingtotheNEshowingblockswithFe,SiO2gradesandclassification
Houston 2S Houston Long Section Fe Grades
Houston 1
Houston 3
Houston Long Section SiO2 Grades
500 metres
Houston Long Section Resource Classification
Measured Indicated Inferred
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17.7 RESOURCECLASSIFICATION
TheestimatedresourceswereclassifiedinaccordancewiththespecificationsoftheNI43101 Policy,namelyinmeasured,indicated,andinferredresources.Theresultsoftheestimatesforthe HoustondepositareshownTables25and26. Mineralresourceswereclassifiedusingthefollowingparameters:

Portionofblock(50%)mustbecontainedwithintheinterpretedoresolid; Blockhadtohaveaminimumof2samplesforinterpolation; MeasuredMineralResources: Blocksestimatedinfirstgrouppass; o SearchellipseGEOS1(x=14.20,y=13.60,z=11.06) o Interpolatedgrades:Fe,Mn,SiO2,Al2O3,P o IndicatedMineralResources: o Blocksestimatedinsecondgrouppass; o SearchellipseGEOS2(x=24.85,y=23.80,z=19.40) o Interpolatedgrades:Fe,Mn,SiO2,Al2O3,P InferredMineralResources: o Blocksestimatedinthirdgrouppass; o SearchellipseGEOS3(x=71.07,y=68.09,z=55.30) o Interpolatedgrades:Fe,Mn,SiO2,Al2O3,P Table25HoustonDepositNI43101Compliantvs.HistoricalIronResources
OreType Classification Tonnage NBLNB Measured Indicated Inferred HSiO2 Measured Indicated Inferred Total Measured Indicated Inferred 6,700 5,274 1,004 1,329 1,382 494 43101 SG 3.52 3.51 3.48 3.33 3.33 3.32 Fe% 61.12 60.40 59.17 52.64 52.71 52.55 Historical SiO2% Tonnage 8.58 9.61 11.43 21.33 21.08 21.19 10.69 12.00 14.65 9,114 Fe% 57.43 SiO2% 7.13 7.13
8,029 3.49 59.71 6,656 3.47 58.80 1,498 3.43 56.99
9,114 57.43
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Table26HoustonDepositNI43101CompliantManganiferousIronResources
NI43101Compliant Measured(LMN+HMN)
351 Indicated(LMN+HMN) 54.4 9.5 5.0 Total 831 54.3 9.1 5.5 17.8 RESOURCESVALIDATION Visualinspectiononsectionsofinterpolatedblockgradesagreedwellwiththecompositegrades anditisconsideredacceptable. Asecondvalidationwasdoneusing20traceblocks.Interpolatedgradesassignedtotheseblocks agreedwiththegradesofsamplesinthem. May18,2010 Page70
Tonnes (x1,000) 480
Fe% 54.2
SiO2% 8.8
Mn% 5.8
18. OTHERRELEVANTDATAANDINFORMATION(ITEM20)
18.1 COMMUNITYANDSOCIALISSUES
LIMhasestablishedanactivecommunityrelationsprogramsincemid2005andanongoingeffort ismadetoworkverycloselywiththeFirstNationstofocusondevelopingandmaintaining productiveworkingrelations,ensuringagoodunderstandingoftheproposedprojectandwith TSH,toidentifyandundertaketheworknecessarytoallowforatimelyexpansion/upgradeofthe TSHoperationstoincludetheshipmentofironore. LIMhassignedanImpactBenefitsAgreement(IBA)withtheInnuNationofLabrador.Inaddition, MemorandaofUnderstandinghavebeensignedwiththeInnuNationofMatimekushLacJohnand theNaskapiNationofKawawachikamachandextensivecommunityconsultationhasbeen conductedwiththenearbycommunities,aswellascommunitiesinwesternandcentralLabrador (LabradorCity,Wabush,HappyValleyGooseBay).Theseconsultationsandagreementswillensure acloseworkingrelationshipwiththeInnuofLabradorwithrespecttotheirinvolvementinthe provisionoflabour,goods,andservices.
18.1.1 BENEFITSOFTHEPROJECT
ThesuccessfulstartupofLIMsDSOprojectwilllikelybethefirstpositiveeconomicstimulustothe northwestLabradoreconomiesin30years.Itshouldleadto20+yearsofeconomicstability. TheprojectwilldevelopdepositsofironoreandmanganiferousorenotpreviouslyworkedbyIOC butwhichwereevaluatedandwerepartofIOCsreservesandresourcesatthetimeofclosureofits operationsintheareain1982.ThedepositsconsideredofhighpriorityforLIMarelocatedwithin reachofexistinginfrastructure,includingroadaccess,adjacenttoelectricalpowerlinesandclose totherailwayterminalandproposedloadingyard. Costeffectiveandreliablerailtransportationisgoingtobeakeycomponentofanydirectshipping ironoreoperations.TheTSHrailwaycompanyisalreadyownedbyaconsortiumofFirstNations andprovidesanidealbasisuponwhichtodevelopothertransportationsolutionsfortheproject. Forthefirstphaseofoperations,whichincludesthebeneficiationsiteatSilverYardandminingthe JamesandRedmonddeposits,theconstructionphasewillgenerateupto40jobswiththatnumber increasingtoabout110onanongoingproductionbasis.Theeconomicimpactofsuchemployment andcontractingbusinessonthesurroundingcommunitiescouldbeverypositiveandleadtothe developmentofothersupportandservicesectorjobsandtheconsistentandplanneddevelopment andgrowthofthetownoftheLabradorareaandsurroundingcommunities.
18.2 MARKETS
Themarketforironoresandrelatedproductshasseensomesubstantialchangesinrecentyears. ThesehavebeendriveninthemostpartbytheboomingresurgenceoftheChineseeconomyand thatcountrysrapidlyincreasingdemandforrawmaterialsparticularlysteelanditsfeedproduct, ironore.ThisdemandinthefirstinstancehasbeenmetbyincreasesinAustralianand,toalesser extent,IndianandBraziliansupply.
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ItisexpectedthattheEuropeanmarketisthemostlikelydestinationforproductsfromtheLIM projectgiventhepotentialfreightadvantageoverotherproducers,butthereremainsastrong demandfromtheFarEastandinparticularfromChinaforironore. Ironoreprices,otherthanforpelletsandsomeminorDirectReducedIron(DRI)feeds,arebased onsinterfineprices,withapremiumforlump.
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19. CONCLUSIONS (ITEM21)

TheauthorsreviewofLIMsdataandhisknowledgeoftheprojectobtainedduringtheperiod 20052009haveshownthatthereismorethansufficientmerittocontinuetheexplorationand developmentoftheHoustonandotherScheffervilleareadirectshippingironoredeposits. IthasbeenclearlydemonstratedbythisreportontheHoustondepositresourceestimateaswellas byearlierreportsontheJamesandRedmonddepositresourceestimatesthatthehistorical resourcescalculatedbyIOCarereliable. IOCpreviouslyworkedintheverysameareasofQuebecandLabradorbetween1954and1982and producedsome150milliontonsoflumpanddirectshippingironoreandcarriedoutexploration toextendthelifeoftheseoperationtowellafter1982. Whentheeconomicconditionschangedand themarketforthatorewasnolongerattractive,theminesclosed.However,theexploreddeposits remainedreadyforexploitationwhenfavourablemarketconditionsreturned. LIMhasnowbroughttheresourcescontainedinthreedeposits(Houston,JamesandRedmond)in compliancewithNI43101.LIMplanstostartinitialproductionofitsPhaseOneoperationsfrom theJamesdepositinJuly2010havinginvestedasignificantamountincapitalexpenditureand upgradingofexistinginfrastructure.TheJamesandRedmondoperationswillcontinuefor approximately45yearsbeforebeingsupplementedbyproductionfromtheHouston,Gill,Ruth Lake8andotherdeposits(subjecttoadditionalEISandregulatoryapprovals). TheotherdepositsinLabrador,AstrayLakeandSawyerLake,southeastofSchefferville,aswellas HowseandKivivic,northwestofScheffervillearefurtherfromthetownofScheffervilleandrequire moreinfrastructuredevelopmentandthereforehighercapitalexpenditures.Theknowledgeof thesedepositsislessdetailedandmoreexplorationwillberequiredtobringthesehistoricinferred resourcestoNI43101complianceandindicatedclassification.
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20. RECOMMENDATIONS(ITEM22)
Followingthereviewofallrelevantdataandtheinterpretationandconclusionsofthisreview,itis recommendedthatexplorationontheHoustonpropertyshouldcontinue.Theresultsofpast explorationhavebeenverypositiveandhavedemonstratedthereliabilityoftheIOCdatawhichhas beenconfirmedwiththerecentexploration. SomeadditionalminordrillingisrecommendedtoevaluatepossibleextensionsoftheHouston deposittothesouthandtoinfill,inmoredetail,areasbetweenthemainconcentrationsofironore. AprogramofRCdrillingshouldcontinuetoexplorethepossibleextensionoftheHoustondeposit tothesouth,possibledepthcontinuityaroundtheHouston1zoneandintheareasbetweenthe Houston1and2zonesforpossiblecontinuity.Drillingwillalsotestthecontinuitybetween Houston3andHouston1andtothenorthofHouston2N. Theadditionaldrillingof18RCdrillholesisproposed: Aminimumof4RCdrillholesforatotalof400metresisproposedforHouston1onthenewly acquiredpartoftheproperty,inordertoextendanddefinethepossibleeastward,downdip extensionofthemineralization. InHouston2,11RCholesforatotalof1,100metresareproposed.Fiveofthe11holesare locatedbetweenHouston1and2onthenewlyacquiredproperty.Sixofthe11holeswilltest thecontinuitytothenorthofHouston2N. InHouston3,3holesareplannedforatotalof300metrestotestthecontinuitybetween Houston3andHouston1alsoonthenewlyacquiredproperty.
Thetotaldrillingprogramwillimprovethequalityofthegeologicalinterpretationofthetargeted areas. EstimatedbudgetfortheHouston1,2and3Deposits: Drilling1,800metres@$315/metre= $567,000
Subsequenttotheexplorationprograms,outlinedintheforegoingsection,anumberofitemswould needfurtherdevelopmentatHouston.Thefollowingareareasthatneedmorework: Detailedmineplans,includinggeotechnicalandhydrogeologicalstudies,shouldbe preparedforthedeposittooptimizemineproduction,blendingofdifferentoretypesand scheduling;Optimizationofthedevelopmentschedule; Additionalmetallurgicalstudiesmayberequireddependentonthemineralogyofthe deposit; Transportandinfrastructurerequirements,includinghaulagealternativesfortransporting orefromthesitetothebeneficiationplantlocationwillneedtobedesignedandengineered. AdditionalenvironmentalstudiesshouldbecompletedfortheHoustonandotherdeposits formingthenextphaseofplanneddevelopment.Additionalcommunityconsultationand permitapplicationswillberequiredoneachsubsequentphaseofprojectdevelopment.
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21. REFERENCES(ITEM23)
ThefollowingdocumentsareinLIMsfilesandhavebeenreviewedbytheauthor: GeologyofIronDepositsinCanada.VolumeI.GeneralGeologyandEvaluationon IronDeposits.G.A.Gross.DepartmentofMinesandTechnicalSurveysCanada. 1965; ReserveandStrippingEstimate.IronOreCompanyofCanada,January1st,1983. OverviewReportonHollingerKnobLakeIronDeposits.FentonScott.November 2000. AssessmentofanInvestmentProposalfortheHollingerIronOreDevelopmentProject. FinalReport.SOQUEMInc.February2002; PreliminaryScopingStudyfortheLabradorIronOreProject.Provinceof Newfoundland&Labrador,Canada.VolumeI.LabradorIronMinesLtd. September28,2006. TechnicalReportofanIronProjectinNorthwestLabrador,ProvinceofNewfoundland andLabrador.D.Dufort,P.EngandA.S.Kroon,P.EngSNCLavalin,OriginalDate September10th,2007,AmendedOctober10th,2007. ReportonSummerFall2008ExplorationProgram.LabradorIronMinesLimited. February2009. AMineralogicalCharacterizationofFiveCompositeSamplesfromJamesIronOre DepositLocatedinLabradorNewfoundland.SGSLakefieldResearchLtd., February2009. AnInvestigationintoDirectShippingIronOrefromLabradorIronMinepreparedfor SNCLavalinInc.onbehalfLabradorIronMinesLimited.Project12010001 FinalReport.SGSLakefieldResearchLimited.February2009. ReportonChemical,physicalandmetallurgicalpropertiesofJamesSouthLumpore. StudienGesellschaftfrEisenerzAufbereitung.May2009. ReportonChemical,physicalandmetallurgicalpropertiesofKnobLakeLumpore. StudienGesellschaftfrEisenerzAufbereitung.May2009. UpgradingIronOreUsingWetGravitySeparation,Outotec(USA)Inc.May2009. MagneticSeparationofIronOreUsingHGMSMagnet,Outotec(USA)Inc.June2009. ScheffervilleAreaIronOreMineWesternLabradorEnvironmentalImpact Assessment.August2009. WorkAssessmentReport,TheRuthLakeProperty,WesternLabradorProvinceof Newfoundland&Labrador.MRB&Associates,JohnLangtonM.Sc,P.Geo. October30th,2009. ReportonBatchStratificationTestWorkforLIMLabradorIronMinesLimited.MBE Coal&MineralsTechnologyGmbH.November2009. ReportonSinteringtestswithLabradorIronMinessinterfines,StudienGesellschaft frEisenerzAufbereitung,November2009;
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TechnicalReportResourceEstimationoftheJames,Redmond2BandRedmond5 MineralDepositsLocatedinLabrador,CanadaforLabradorIronMinesLtd.SGS GeostatLtd.December18th,2009. LabradorIronMinesLtd.OreBeneficiationPotentialandPhysicalProperties DeterminationFinalReportNo.T1054,COREM,December2009. Reporton2009ExplorationProgram.PreparedbyLabradorIronMinesLimited. December2009. TechnicalReportonanIronProjectinNorthernQuebec.ProvinceofQuebec.A.S. Kroon.March10th,2010. RevisedTechnicalReportonanIronOreProjectinWesternLabrador.Provinceof NewfoundlandandLabrador.A.Kroon,SGSCanadaInc.March18th,2010.
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QUALIFICATIONSCERTIFICATE
I,TerenceN.McKillen,ProfessionalGeologist,doherebycertifythat: Iamaconsultinggeologistresidingat965DavecathRoad,Mississauga,Ontario,L5J 2R7. IgraduatedfromtheUniversityofDublin,TrinityCollegein1968andholdaBachelors andaMastersDegreeinNaturalSciences(Geology).IobtainedaMastersDegree inMineralExplorationandMiningGeologyfromtheUniversityofLeicesterin 1971. IamamemberingoodstandingoftheAssociationofProfessionalGeoscientistsof Ontario(#0216);theProfessionalEngineersandGeoscientistsofNewfoundland andLabrador(#04525)andtheOrderofProfessionalGeologistsofQubec (#1392)andamdesignatedasaspecialistinGeologyandMineralExploration andDevelopment. Ihaveworkedasageologistandminingexecutiveinthemineralsindustryforover40 yearssincemygraduationfromuniversity. IhavereadthedefinitionofqualifiedpersonsetoutinNationalInstrument 43101(NI43101)andbyreasonofmyeducation,membershipofprofessional associationsandpastrelevantworkexperience,Ifulfilltherequirementstobea qualifiedpersonforthepurposesofNI43101. IamresponsibleforthisResourceEstimate&TechnicalReportontheHoustonIronOre DepositinWesternLabradorinitsentirety.Ihavevisitedtheprojectsiteon severaloccasions,includingmostrecentlyon22Oct.2009. IwasinstrumentalintheoriginalacquisitionoftheHoustonandnearbyironore propertiesheldbyLabradorIronMinesLimited,havebeeninvolvedinthe corporatedevelopmentthereofandhavepreparedearliertechnicaland businessreportsandevaluationspertainingtotheHoustonandotherironore propertiesheldbyLIMHLinLabradorandQuebecordirectlysupervisedthe preparationofsuchtechnicalreports. IamnotindependentofeitherLabradorMinesLimitednorLabradorIronMines HoldingsLimitedasdescribedinsection1.4ofNI43101,beingadirectorand officerofbothcompanies. IhavereadNationalInstrument43101StandardsofDisclosureforMineralProjects andForm43101F1andCompanionPolicy43101CPandcertifythatthis ResourceEstimateandTechnicalReporthasbeenpreparedincompliancewith suchinstrument(s). Asofthedateofthereportandtothebestofmyknowledge,Iamnotawareofany materialfactormaterialchangewithrespecttothesubjectmatterofthe ResourceEstimateandTechnicalReportthatisnotreflectedinthereport,the omissionofwhichdisclosurewouldmaketheResourceEstimateandTechnical Reportmisleading. IconsenttothefilingoftheResourceEstimateandTechnicalReportwithanystock exchangeorotherregulatoryauthorityandanypublicationbythemfor
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23. ILLUSTRATIONS(ITEM26)
Thefollowingplansareattachedasillustrationsoftheexplorationdrillingandtrench samplingprogramscarriedoutLIMtodate. ListofPlansandSections Houston1&2DrillHoles Houston3DrillHoles
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Houston1&2SDrillHoles
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Houston3DrillHoles
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APPENDIXI
(ListofdrillholesandtrenchescompletedbyLIMintheHoustonproperty)

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HoleID HN0601 HN0602 HN0603 HN0604 HN0605 RCHU0012008 RCHU0022008 RCHU0032008 RCHU0042008 RCHU0052008 RCHU005A2008 RCHU0062008 RCHU0072008 RCHU0082008 RCHU0092008 RCHU0102008 RCHU0112008 RCHU0122009 RCHU0132009 RCHU0142009 RCHU0152009 RCHU0162009 RCHU0172009 RCHU0182009 RCHU018A2009 RCHU0192009 RCHU0202009 RCHU020A2009 RCHU0212009 RCHU0222009
Easting 650617 650620 651022 650620 651644 650615 650581 650567 651087 651077 651080 651029 651723 651712 652125 652176 652144 651035 651014 651066 651045 651025 651086 651013 651015 651087 651063 651064 650538 650586
Northing 6065073 6065121 6064534 6065121 6063846 6065119 6065086 6065068 6064596 6064565 6064566 6064510 6063804 6063753 6063154 6063083 6063065 6064702 6064682 6064655 6064627 6064606 6064624 6064547 6064543 6064537 6064514 6064515 6065192 6065159
Elev(m) 586 583 590 583 574 583 589 594 584 585 585 590 570 571 565 561 565 582 583 582 584 586 581 589 589 586 588 588 585 581
Len 32 52 72 52 45 97 85 54 55 33 87 66 45 51 93 53 72 66 75 90 69 70 79 28 9 69 15 73 30 111
Az 0 230 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Dip 90.0 60.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0
Type DD DD DD DD DD RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC
Status Cancelled Cancelled Completed Cancelled Abandoned Completed Completed Completed Completed Abandoned Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Abandoned Completed Completed Completed
Start 3Aug06 17Aug06 23Jul06 18Aug06 20Aug06 28Aug08 2Sep08 4Sep08 4Sep08 1Sep08 1Sep08 30Aug08 7Sep08 8Sep08 9Oct08 12Oct08 13Oct08 14Aug09 15Aug09 20Aug09 22Aug09 23Aug09 24Aug09 17Aug09 18Aug09 27Aug09 18Aug09 18Aug09 29Jul09 30Aug09
Finish 3Aug06 17Aug06 2Aug06 19Aug06 20Aug06 1Sep08 4Sep08 6Sep08 6Sep08 3Sep08 3Sep08 1Sep08 8Sep08 10Sep08 11Oct08 13Oct08 15Oct08 15Aug09 17Aug09 22Aug09 23Aug09 24Aug09 27Aug09 18Aug09 18Aug09 28Aug09 18Aug09 20Aug09 29Jul09 1Sep09
May18,2010
Page86
HoleID RCHU0232009 RCHU0242009 RCHU0252009 RCHU0262009 RCHU0272009 RCHU0282009 RCHU0292009 RCHU0302009 RCHU0312009 RCHU0322009 RCHU0332009 RCHU0342009 RCHU034A2009 RCHU0352009 RCHU0362009 RCHU0372009 RCHU0382009 RCHU0392009 RCHU0402009 RCHU0412009 RCHU0422009 RCHU0432009 RCHU0442009 RCHU0452009 RCHU0462009 RCHU0472009 RCHU0482009 RCHU0492009 RCHU0502009 RCHU050A2009
Easting 650557 650547 650603 650564 650647 650588 650661 650636 650617 650698 650560 651543 651543 651559 651604 651666 651672 651634 651607 651539 651531 651624 651589 651750 651753 651774 651769 651711 651822 651815
Northing 6065133 6065117 6065134 6065105 6065093 6065032 6065055 6065029 6065012 6065034 6065175 6064009 6064009 6063977 6063971 6063868 6063821 6063880 6063941 6063962 6063940 6063835 6063925 6063698 6063583 6063614 6063652 6063793 6063540 6063554
Elev(m) 589 590 583 589 581 596 583 589 594 583 584 579 579 578 577 573 572 574 576 580 585 578 579 569 574 570 569 571 567 567
Len 99 69 126 99 120 67 93 63 33 97 90 9 117 82 78 81 102 96 78 72 39 42 90 72 60 66 69 72 36 51
Az 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Dip 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0
Type RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC
Status Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Abandoned Completed Completed Completed Completed Abondoned Abondoned
Start 2Aug09 31Jul09 28Aug09 29Jul09 4Aug09 10Aug09 6Aug09 12Aug09 13Aug09 8Aug09 1Sep09 3Sep09 3Sep09 5Sep09 6Sep09 7Sep09 8Sep09 9Sep09 11Sep09 12Sep09 14Sep09 15Sep09 16Sep09 17Sep09 18Sep09 20Sep09 21Sep09 23Sep09 26Sep09 27Sep09
Finish 4Aug09 2Aug09 30Aug09 31Jul09 6Aug09 12Aug09 8Aug09 13Aug09 14Aug09 10Aug09 2Sep09 5Sep09 5Sep09 6Sep09 7Sep09 8Sep09 9Sep09 11Sep09 12Sep09 14Sep09 15Sep09 16Sep09 17Sep09 18Sep09 20Sep09 21Sep09 23Sep09 25Sep09 27Sep09 28Sep09
May18,2010
Page87
HoleID RCHU0512009 RCHU051A2009 RCHU051B2009 HNTR0106 TRHU20012009 TRHU30012009 TRHU30022009 TRHU30032009 TRHU30042009 TRHU30052009 TRHU30062009 TRHU30072009 TRHU30082009
Easting 652147 652147 652147 651006 650555 651517 651561 651615 651668 651716 651748 651771 652124
Northing 6063115 6063115 6063115 6064569 6065168 6063932 6063896 6063814 6063738 6063697 6063573 6063508 6063073
Elev(m) 564 564 564 587 585 584 584 583 579 575 575 575 564
Len 9 6 69 75 4 76 85 63 49 31 48 57 66
Az 0 0 0 41 30 35 52 42 49 35 41 58 49
Dip 90.0 90.0 90.0 2.0 0.0 1.2 8.7 10.7 5.1 20.0 6.6 24.2 4.0
Type RC RC RC TR TR TR TR TR TR TR TR TR TR
Status Abondoned Abondoned Abondoned Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed
Start 29Sep09 29Sep09 29Sep09 22Aug06 25Aug09 30Aug09 1Sep09 2Sep09 2Sep09 2Sep09 3Sep09 3Sep09 8Sep09
Finish 29Sep09 29Sep09 1Oct09 23Aug06 25Aug09 31Aug09 1Sep09 2Sep09 2Sep09 2Sep09 3Sep09 3Sep09 8Sep09
May18,2010
Page88

Houston 43101 - 20100518

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Houston 43101 - 20100518

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LABRADORIRONMINESLIMITED

RESOURCEESTIMATE&TECHNICALREPORT ONTHEHOUSTONIRONOREDEPOSIT WESTERNLABRADOR PROVINCEOFNEWFOUNDLANDANDLABRADOR CANADA

Preparedby T.N.McKillen,B.A.(Mod),M.A.,M.Sc.,P.Geo. May18,2010

16.5 16.6 16.7 17.

19. 20. 21. 22. 23.

byLIMpersonnelin2006and2009byexperiencedgeologistsortechniciansfollowingwell establishedsamplingandpreparationprocedures.Thesampleswerereducedtorepresentative, smallersizesamplesthatweresenttoSGSLakefieldlaboratoryortoACTLABSlaboratoryfor analysisandtesting.

61.12 60.40 59.17 52.64 52.71 52.55

8.58 9.61 11.43 21.33 21.08 21.19 10.69 12.00 14.65

8,029 3.49 59.71 6,656 3.47 58.80 1,498 3.43 56.99

Tonnes (x1,000) 480 351 831

Fe% 54.2 54.4 54.3

SiO2% 8.8 9.5 9.1

Mn% 5.8 5.0 5.5

HoustonLake 1 HoustonLake 3 HoustonLake 1 TOTAL 66

5. ACCESSIBILITY,CLIMATE ,LOCALRESOURCES, INFRASTRUCTURE,PHYSIOGRAPHY(ITEM7)

ScheffervilleOre Types (FromIOCC):

Therecentexplorationprogramswereintendedtoconfirmandvalidatethehistoricresources reportedbyIOCandtomakethemNI43101compliant.AppendixIlistsdrillholesandtrenches completedbyLIMbetween2006and2009.

Year 2006 2008 2009

Length(m) 253 791 3,136

13.7.1.2 PreparationLab Duplicates

16. MINERALPROCESSINGANDMETALLURGICALTESTING (ITEM18)

P% 0.016 0.011 0.057

Redmond Blueore 57.8 13.1 0.02 0.32 2.63

KnobLake(RedOre) SinterFeed 6.7mm+150m 38m 50mm+6.7mm

Houston(BlueOre) SinterFeed 6.7mm+150m 38m 50mm+6.7mm

Redmond5(BlueOre) SinterFeed 6.7mm+150m 38m

Inferredmineralresources, Indicatedmineralresourcesand Measuredmineralresources.

Compliantmineralreservesarethatpartofameasuredmineralresourceorindicatedmineral resourcewhichcanbeextractedlegallyandataprofitundereconomicconditionsthatarespecified andgenerallyacceptedasreasonablebytheminingindustryandwhicharedemonstratedbya preliminaryfeasibilitystudyorfeasibilitystudyasfollows:

Houston 2S Houston Long Section Fe Grades

Houston Long Section SiO2 Grades

Houston Long Section Resource Classification

Measured Indicated Inferred

8,029 3.49 59.71 6,656 3.47 58.80 1,498 3.43 56.99

Tonnes (x1,000) 480

19. CONCLUSIONS (ITEM21)

Thetotaldrillingprogramwillimprovethequalityofthegeologicalinterpretationofthetargeted areas. EstimatedbudgetfortheHouston1,2and3Deposits: Drilling1,800metres@$315/metre= $567,000

Len 99 69 126 99 120 67 93 63 33 97 90 9 117 82 78 81 102 96 78 72 39 42 90 72 60 66 69 72 36 51

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