LABRADOR IRON MINES Recommendation: SPECULATIVE BUY ... Report.pdf · COMPANY OVERVIEW 3 PROJECT DETAILS 4 Ownership History 6 Operational Characteristics 6 Transportation and Infrastructure

Please see important disclosures on pages 19 and 20.

February 5, 2009

LABRADOR IRON MINES Recommendation: SPECULATIVE BUY HOLDINGS LIMITED 12-Month Target: C$2.35 (TSX-LIR C$0.67) Risk Rating: ABOVE AVERAGE

Sector: MINING AND METALS Analyst: PETER CAMPBELL, P. ENG. e-mail: [email protected] Tel: (416) 304-3963 Fax: (416) 214-0177 Associate: MARK TURNER, MBA e-mail: [email protected] Tel: (416) 304-3964 Fax: (416) 214-0177

INITIATING COVERAGE Labrador Iron Mines Holdings Limited’s (LIM) is

developing direct shipping iron ore projects all located in Labrador, near Schefferville, Québec. Direct shipping iron ore does not require any processing beyond simple crushing, screening and washing to produce a saleable product.

LIM expects a small amount of initial production from its Phase 1 deposits in calendar Q3/09, ramping up to 1.5 million tonnes per annum by 2010. With growing production from Phase 2 deposits, production will increase to 3 million tonnes per annum by 2012.

LIM’s eight deposits contain over 90 million tonnes of historical resources grading 56 to 58% Fe. Simple washing of the ore is expected to upgrade it to approximately 65% Fe.

LIM’s projects are basically brownfield expansions. The Iron Ore Company of Canada last operated in the area in 1982 and had extensive operations at that time. LIM’s Phase 1 deposits lie within the bounds of the former operations.

The Company is taking a light-weight approach. It intends to use contract mining and beneficiation to minimize the initial capital expenditure required to achieve Phase 1 production. The Company believes that it has all the funds necessary to meet its objectives and will not require any additional financing.

The project benefits from a significant amount of infrastructure already in place: townsite (Schefferville), airport, rail line to port facilities at Sept-Îles, hydro power and access roads to Phase 1 deposits.

As at September 30 2008, LIM had working capital of C$40.8 million or C$1.10 per share.

We are cautiously optimistic of global demand for steel and iron ore recovering by H2/09, and we are using long-term pricing of US$0.922 per DMTU of fines, levels not seen since 2006/2007.

We are initiating coverage on Labrador Iron Mines Holdings Limited with a SPECULATIVE BUY recommendation, an ABOVE AVERAGE risk rating, and a 12-month target price of C$2.35 per fully diluted share.

Company StatisticsMarket Capitalization Basic SharesFully Diluted Shares 52-Week Range C$0.41 - C$5.95Cash and Short-Term Investments (9/30/08)Long-Term Debt (9/30/08)Working Capital (9/30/08)Book Value (9/30/08)Major Shareholder (11/21/08) Passport Management, LLC 22.1%

Summary of Financial and Operating ProjectionsFYE: Mar-31 2011E 2012E 2013E 2014E 2015ECalendar Year EstimatesLump Ore (000 tonnes) 400 600 600 600 600Fine Ore (000 tonnes) 1,600 2,400 2,400 2,400 2,400Lump Price (US$ per DMTU) 1.2125 1.1525 1.1525 1.1525 1.1525Fines Price (US$ per DMTU) 0.9700 0.9220 0.9220 0.9220 0.9220U$:C$ Exchange 1.1100 1.0900 1.0900 1.0900 1.0900

EPS FD (C$) $0.49 $0.65 $0.68 $0.71 $0.73CFPS FD (C$) $1.02 $1.10 $1.03 $0.98 $0.95P/E FD 1.4x 1.0x 1.0x 0.9x 0.9xP/CF FD 0.7x 0.6x 0.6x 0.7x 0.7x

C$24.9 million

C$43.3 million

37.2 million

NilC$40.8 millionC$3.76/share

48.4 million

Labrador Iron Mines Holdings Limited is a Canadian junior mining company that is developing direct shipping iron ore deposits near Schefferville, Québec. The Company expects initial production from its Phase 1 deposits in calendar Q3/09 ramping up to 3 million tonnes per annum by 2012. With Phase 3 deposits, total annual production will reach 6 million tonnes. LIM believes that it has raised all the capital required to achieve its Phase 1 production goals. Initial capital expenditures are minimized due to extensive infrastructure already in place and also by making use of contract mining and beneficiation.

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The information contained in this report was obtained from sources we believe to be reliable. We do not represent that such information is accurate or complete and it should not be relied on as such. Any opinions expressed herein reflect our judgment at this date and are subject to change. Jennings

TABLE OF CONTENTS COMPANY OVERVIEW 3 PROJECT DETAILS 4

Ownership History 6 Operational Characteristics 6 Transportation and Infrastructure 8 Reserves / Resources 9 Off-take / Sales 10

FINANCINGS / BALANCE SHEET 10 PROJECT SCHEDULE / CATALYSTS 11 IRON ORE PRICING 12 VALUATION AND RECOMMENDATION 13 KEY INVESTMENT RISKS 14 APPENDIX A – MANAGEMENT AND BOARD OF DIRECTORS 16 APPENDIX B – PRO FORMA REVENUE AND INCOME STATEMENT 18

Capital Inc. and/or employees from time to time may hold shares, options or warrants on any issue included in this report and may buy or sell such securities. This report is not to be construed as an offer to sell or solicitation to buy securities. Member – CIPF. Jennings Capital (USA) Inc. is a member of SIPC.

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COMPANY OVERVIEW Labrador Iron Mines Holdings Limited (“LIM” or the “Company”) is exploring and developing direct shipping iron ore projects in the Schefferville mining camp. Direct shipping ore requires no subsequent processing; mined ore is crushed, washed and separated into a coarse product (lump ore) and a fine product (fines). Both products are marketed directly to the consumer, primarily steel producers. LIM’s current project portfolio consists of eight iron ore deposits formerly owned by the Iron Ore Company of Canada (“IOC”).

The iron ore deposits owned by LIM are all located in Labrador, just across the provincial border from Schefferville, Québec. This provides LIM with an advantage in that it is able to deal with one provincial government for permitting purposes.

LIM’s Schefferville Project deposits are its only material interests. The Company listed on the TSX in December 2007, by way of an IPO that raised C$52.8 million. Management believes that these funds are sufficient to bring the project into production, which is targeted to commence in calendar Q3/09. Under the current project schedule, full commercial production of 3 million tonnes per annum (mtpa) of direct shipping iron ore would be achieved by 2012. The ultimate production rate could reach as high as 6 mtpa when the largest of its deposits are brought into production—expected to begin in 2016.

Key elements to the Company’s optimistic view and aggressive schedule include:

the rapid conversion of historical IOC resources to NI43-101 compliance

pits scheduled for first production have been stripped and are ready for production

significant local infrastructure already exists

essentially a “brownfield” expansion project for easy permitting

utilization of contract mining and beneficiation, reducing up front capital requirements

In 2008, the Company was actively advancing the project to meet its aggressive development schedule. An engineering and resource study is presently being prepared by SNC-Lavalin Group Inc. (TSX-SNC) (“SNC”) and Geostat Systems International Inc. (“Geostat”) and is expected to be delivered shortly. SNC is responsible for the engineering design while Geostat is preparing the mineral inventory. The initial deposits to be mined contain historical resources and were drilled by LIM during the 2008 season. The drilling program was designed to bring the historical resources of a number of the deposits up to NI43-101 standards. Another key activity during 2008 was the taking of a 6,500 tonne bulk sample on the deposits where mining is to initiate. The material has been sent for metallurgical testing for flow sheet design and for suitability testing as blast furnace feed.


http://www.labradorironmines.ca/�

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Location Map Showing Labrador Iron Mine’s Projects

Source: Labrador Iron Mines

PROJECT DETAILS The Company has identified eight direct shipping iron ore deposits that at one time were owned by IOC when it last operated in the Schefferville mining camp in the early 1980s. Over the years, IOC let its ownership of these claims lapse. Between September 2003 and March 2006, Fenton and Graeme Scott and Energold Minerals Inc. began staking claims over the soft iron ores on the Labrador side of the Schefferville camp. Recognizing a need to consolidate the mineral ownership, Energold Minerals Inc. entered into agreements with the various parties, which have subsequently been assumed by LIM.

LIM intends to bring its eight deposits into production in a phased approach. During Phase 1, it will bring four deposits containing approximately 18 million tonnes into production, over a five-year production schedule at a terminal rate of 2.5 mtpa. Phase 2 will see an increase in production to 3 mtpa, as LIM brings two other deposits on line containing approximately 20 million tonnes. Phase 3 will overlap with Phase 2 and bring on the remaining two deposits containing approximately 55 million tonnes. Phases 2 and 3 are expected to have a 15-year life and increase production to 6 mtpa.


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Production Sequence

TonnageProject Phase Deposit (000s tons)

Phase 1 James 4,486Redmond 1,357Houston 9,090Knob 3,662

Phase 2 Sawyer 12,000Astray 7,818

Phase 3 Howse 28,288Kivivic 26,258

Source: JCI from Company documents

The Phase 1 deposits are accessible by road and, in some cases, partially pre-stripped and ready for development. Strategically, these deposits are located closest to the rail head at the town of Schefferville. The Phase 2 deposits (Sawyer and Astray) are approximately 60 km to the southeast of Schefferville and require new road access. The Phase 3 deposits are northwest of Schefferville, with Howse being approximately 20 km and Kivivic 50 km along the existing IOC haul road.

Location of LIM’s Phase 1 and Phase 3 Deposits (Phase 2 Deposits off the Map to the Southeast; Refer to Map Above)



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OWNERSHIP HISTORY In 1954, IOC started open pit mining operations in the Schefferville mining camp. Direct shipping ore from these operations graded 56 to 58% Fe and was exported to steel companies in the United States and Western Europe. The properties and iron deposits that currently form LIM’s holdings in the camp were part of the original IOC holdings in the Schefferville area. The historical reserves and resources identified on LIM’s deposits were estimated by IOC.

From 1954 to 1982, a total of ~150 million tons of ore was produced from the Schefferville area. The Hollinger North Shore Exploration Company Limited (“Hollinger”) was the owner of the underlying mining leases of the IOC operations. Following the closure of the mining operations in 1982, ownership of the leases in Québec reverted to Hollinger and the mining rights held by IOC in Labrador reverted to the Crown.

In the early 1990s, Hollinger was acquired by La Fosse Platinum Group Inc. (“La Fosse”) who conducted feasibility studies on marketing, bulk sampling, metallurgy and carried out some stripping of overburden at the James deposit. La Fosse sought and was granted a project release under the Environmental Assessment Act for the James deposit in June 1990, but did not proceed with project development; subsequently, the claims were permitted to lapse.

With the exception of pre-stripping work carried out on the James deposit and the mining of the Redmond deposit by IOC, none of the iron deposits within the LIM mineral claims was previously developed for production during the IOC period of ownership.

Between September 2003 and March 2006, Fenton and Graeme Scott and Energold Minerals Inc. began staking claims over the direct shipping iron ores on the Labrador side of the Schefferville camp. Recognizing a need to consolidate mineral ownership, Energold entered into agreements with the various parties, which have subsequently been assumed by LIM.

There are a number of First Nations people living in the Québec-Labrador peninsula with overlapping claims to treaty or aboriginal land rights. In July of 2008, LIM signed an Impact Benefits Agreement (IBA) with the Innu Nation of Labrador and has also signed MOU’s with a number of Québec-based First Nations groups. The IBA is a life-of-mine agreement that establishes the processes and sharing of benefits that will ensure an ongoing positive relationship between the parties in exchange for the Innu’s consent and support for the project. Details of the IBA have not been publicly disclosed.

All of LIM’s deposits are subject to a royalty payable to the underlying lease holder. The royalty is set at a relatively high 3% of FOB sales; however, it is subject to a cap schedule by deposit:

The royalty on Phase 1 deposits James, Houston, Redmond and Knob is capped at C$1.50 per tonne of FOB sales.

The royalty on Phase 2 deposits Sawyer and Astray is capped at C$1.00 per tonne of FOB sales

The royalty on Phase 3 deposits Howse and Kivivic is capped at C$0.50 per tonne of FOB sales

OPERATIONAL CHARACTERISTICS Labrador Iron Mines envisions a “lightweight”, low initial CAPEX approach to achieve initial production from the project. This is possible due to the fact that the Phase 1 deposits are readily accessible, have significant infrastructure already in place and, perhaps most importantly, the bulk of the operation will be operated by contract mining. Contracts will cover direct production and light fleet operation. As was the case with previous operations, all mining will be by conventional excavate and truck open pit mining methods.


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As with all direct shipping projects in the Schefferville mining camp, rail transportation to port is limited to approximately eight months of the year. Ore tends to freeze in the rail cars during the winter months making handling at the port difficult. Typically, enough ore is transported during the eight months to build a stockpile at the port to support year-round shipping. Active mining normally restarts in April and continues through November with a work stoppage of four months during the winter. It is anticipated that the contractor will mobilize every year in the beginning of April to fix roads and service lines, assure adequate supplies and rehabilitate the operating pits to a working condition after the winter. It is envisioned that LIM will perform all mine planning, survey and grade control with its own personnel based in the area.

The Company believes that Phase 1 production can commence with minimal investment in new and existing infrastructure. Since the operation will use contract mining, capital is not required for the purchase of mining equipment. The mining contractor will provide all equipment to drill, blast, load and haul ore and waste. Because of the short distance from the James and Redmond deposits, ore transported to the processing and shipping site would most likely not require an additional haulage fleet, as it is expected that pit trucks will be used for this purpose. From the Redmond property and later from Houston and Knob, light-weight semi-trailer units will haul the ore to the processing site.

Phase 1 Deposits Stripped and Ready for Mining (Top-Left to Bottom-Right: James, Redmond, Knob Lake, Houston)



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When IOC last ran the direct shipping operation in Schefferville, run-of-mine ore was crushed, screened and shipped. No further processing of the ore was performed. The run-of-mine ore graded 56 to 58% Fe. In general, blast furnace feed runs 50 to 70% Fe with the usual range currently being in the 60 to 65% Fe range. By this measure, run-of-mine ore from LIM’s deposits is of a lesser grade where blast furnace operators would need to blend higher-grade ore to achieve the optimum charge grade.

One of the simple ways in which LIM’s iron ore product can be upgraded is with washing. The process of washing is a comparatively simple process whereby excess fines are removed from the feed. In this type of ore, a large component of low grade material and silica are contained within the fine material. Through simple washing the grade of run-of-mine ore can be increased by as much as 10 to 15%. There are no chemicals or reagents used in the washing process and waste material can normally be re-deposited in an existing pit.

LIM envisions a very simple wash plant to be located near (or at) the Silver Yard where ore will be loaded onto rail cars for shipping to Sept-Îles. The wash plant will not consist of much more than a simple trailer mounted trommel and screens. The Company indicates that washing is expected to recover 75% of the iron units and result in a final product grading approximately 65% Fe. The final saleable product is expected to consist of 25% lump ore and 75% fines.

In the 2008 exploration season, the Company extracted 6,500 tonnes from James, Knob Lake, Redmond and Houston. The primary purpose of the bulk sample is for metallurgical testing, which will be part of the forthcoming engineering study.

Bulk-Sample Stockpiles


TRANSPORTATION AND INFRASTRUCTURE LIM envisions a light-weight start-up operation with only minimal capital expenditure required to get it started. This is primarily due to the significant amount of infrastructure that remains in place from the previous IOC mining operations.


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Some of the more significant infrastructure that remains in place includes:

mine access roads (IOC mine roads)

town site (Schefferville)

airport

railroad and rail beds (TSH railway)

power (Menehek Hydro Plant)

port facilities (Sept-Îles)

Most of the existing roads that provide access to the different properties designated for Phase 1 production remain in excellent condition. Road access is also mostly available to the Howse deposit in Phase 3, but Kivivic, the other Phase 3 deposit requires the existing road to be extended. The Phase 2 deposits, however, require new road access to be built. Being located 60 km to the southeast, the Company will likely relocate the wash facilities nearer this location as it becomes the production centre. The advantage is to minimize haulage of waste product that will be washed out of the feed.

Power from the nearby Menehek hydroelectric plant is sufficient to supply LIM’s operation. With a simple shovel and truck operation and a crushing and screening plant, power requirements from the grid for the operation are minimal.

The existing rail line terminates at Schefferville. A short spur line in Labrador once connecting IOC’s former Silver Yard to the rail line has been removed but the rail bed remains in good condition and the spur line can be re-established easily, at minimal cost. Perhaps a larger issue is the condition of the Tshiuetin Rail Transportation Inc. (TRT) short line railway between Schefferville and Ross Bay Junction near Labrador City. While the line was formerly used by IOC to transport iron ore, it has not been used for this purpose for many years. Track upgrades will be required as freight tonnage from LIM and other operators in the area is set to increase over the next few years. Studies of the required upgrades have been conducted and concluded that the most significant upgrade required is extensive replacement of old and worn ties to accommodate the increased freight tonnage. Bridges and culverts are generally acceptable, but increased gross tonnage shipped will possibly require localized upgrades as time progresses. Finally, with the greatly increased train frequency, as a result of increased mining activities in the area, sidings that have generally not been used over the last several years will need to be upgraded or replaced. It is also possible that additional sidings may be required. LIM is of the opinion that the upgrades can be accomplished over time as mining activities ramp up over the next few years.

LIM has entered into a Memorandum of Understanding (“MOU”) with TRT to provide rail transportation, and with others for related infrastructure services including storage and loading facilities services at the port of Sept-Îles. Port facilities accommodating 70,000 tonne vessels will be available in 2009 and 2010. There are plans to possibly expand the facility in subsequent years to accommodate 250,000 tonne vessels.

RESERVES / RESOURCES LIM has acquired or optioned mineral claims over some of IOC’s historic direct shipping ore resources in Labrador. In order to simplify permitting for this project, the Company purposely targeted claims in Labrador only.

The mineral resources referred to in the September 2007 Technical Report are classified as “historic” and are not yet compliant with NI43-101 standards. These historic resources are predominantly based on estimates made by IOC in 1982 and published in its 1983 Direct Shipping Ore (DSO) Reserve Book. IOC


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categorized its estimates as “reserves”. The author of LIM’s NI43-101 technical report adopted the principle that these should be categorized as “resources” as defined by NI43-101.

Historical Resources Based on IOC Information

IOC Historic ResourceDeposit (000s tons)

James 4,486Redmond 1,357Houston 9,090Knob Lake 3,662Sawyer 12,000Astray 7,818Howse 28,288Kivivik 26,258

Total 92,959

Source: JCI from Company documents

The in situ grade of these deposits is reported to be in the range of 56 to 58% Fe. The Company completed a drilling program in 2008, aimed at bringing these resources into compliance with NI43-101 standards. An updated NI43-101 compliant resource estimate on James, Redmond, Houston, Knob Lake and Sawyer (i.e. the deposits to be mined in Phase 1) is expected to be completed in calendar Q1/09.

OFF-TAKE / SALES The Company has not yet signed an off-take or marketing agreement; however, the Company stated that it has recently stepped up its activity in this regard. It is important to remember that LIM’s 2009 production is not expected to start until mid-summer 2009. This means that, given the length of time remaining in the mining season, the Company expects only to produce 200,000 tonnes of direct shipping ore in 2009. This amount of ore could easily be sold on the spot market without a sales or off-take agreement. In fact, this amount of ore is probably best used as a test sample for blast furnace testing by potential off-takers.

Terms for off-take are generally based on the benchmark price for iron ore shipped by Compania Vale do Rio Doce (“Vale”) (NYSE-RIO) from Brazil into Europe. In theory, there should be a slight premium to this price for ore free-on-board (FOB) Sept-Îles, since there is a shipping advantage to Europe from Sept-Îles compared to Brazil. However, due to the comparatively small amount of ore that is available, it is common instead to see a slight discount. There is a trend of late to sell a portion of one’s product on a combined contract to spot ratio; perhaps of 80:20.

FINANCINGS / BALANCE SHEET The Company has completed only one financing for proceeds of C$52.8 million, in association with its IPO in December 2007 (13.2 M shares at C$4.00 per common share plus a half-warrant, with each whole warrant being exercisable at C$5.00 for 24-months). The Company’s strategy was to raise what it believes is sufficient capital to establish production using its “light-weight” approach.

At the end of Q2/08 (fiscal year end March 31), LIM had cash and equivalents of C$43.2 million, current accounts payable and liabilities totalled C$2.7 million, working capital was C$40.8 million and the


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Company had no debt. LIM had shareholder’s equity of C$139.8 million or a book value C$3.76 per share.

Associated with the purchase of the Schefferville mineral properties, at the end of Q2 F2008, LIM carried a future income tax liability of C$36.0 million. This deferred tax liability was due to the difference in the attributed purchase price and the underlying tax value of the properties, assuming LIM and the divesting parties elect for tax purposes to select a nominal transfer price. Due to the low initial CAPEX of the project, we are expecting this deferred tax liability to reverse shortly after commercial production.

PROJECT SCHEDULE / CATALYSTS Many of the key milestones along the way to production in mid-2009 have already been met. Two of the more significant were the successful negotiation of an Impact Benefits Agreement (IBA) with a local First Nations group and the signing of an MOU with the TRT for transportation of ore to Sept-Îles.

The key item remaining is to obtain environmental approval from the provincial government of Newfoundland and Labrador. The Company filed its Environmental Impact Study (EIS) with the authorities on December 20, 2008. The government has 70 days in which to render a decision. Since the application essentially covers what is a brownfield project, there appears to be very little standing in the way of the permit application. Once the environmental permit has been received, LIM can then obtain the necessary mining permits.

In summary, the milestones along the way to initial production in mid-2009 are as follows:

Calendar Quarters

Q1 2009

NI43-101 compliant resource estimate for Phase 1 deposits

Regulatory approval of its EIS

Q2 2009

Application and approval of mining permits

Agreement with contract mining company

Q3 2009

Commence mining of 200,000 tonnes of initial production

Q4 2009

sale of iron ore and receipt of proceeds

finish initial mining for the season

2010

first full-year of mining; increase production to 1.5 mtpa

2011

increase production to 2.5 mtpa (3.0 mtpa in 2012)


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IRON ORE PRICING It is expected that the off-take price for LIM’s direct shipping ore project will be based on the benchmark reference price for lump and fine ore. The reference price negotiated annually between Vale and a large Chinese steel maker, usually Baosteel International, has experienced sharp increases over the last five years (19%, 72%, 19%, 10% and 65%). Last year, Australian producers separately negotiated an 85% increase, which was a departure from historical norms. Current (i.e. 2008) pricing for iron ore fines FOB Brazil is US$1.344 per DMTU (Dry Metric Tonne Unit). LIM’s fine and lump ore grading 64% Fe would sell on this basis for US$86.00 per dry tonne of fines and US$107.50 per dry tonne of lump ore. In years previous to this recent upswing in prices, annual benchmark price changes averaged ±5%. The period of rapidly increasing benchmark prices may be over.

There has been significant reduction in worldwide steel making in the last quarter of calendar 2008. Chinese steel mills have reportedly slashed output by 20 to 25% across the board. The world’s largest steel producer, ArcelorMittal (NYSE-MT), has reduced its output by 30% and has announced 9,000 lay-offs throughout its worldwide operations. ArcelorMittal is such a large steel producer that its reduction in output exceeds the total annual output of the world’s second largest steel producer, Nippon Steel Corporation (TSE-5401). These production cuts, combined with the worldwide economy apparently sinking into recession, have darkened the outlook for iron ore prices.

Annual benchmark pricing is normally announced around March 31 of each year, with negotiations taking place before then. At present, consensus opinion for 2009 is for a change between 0% and a decrease of 20% in the benchmark price. There are a few opinions that expect decreases of 50 to 85%. Our forecast for iron ore prices is shown in the figure below:

JCI Price Forecast for Iron Ore and Iron Ore Products

Iron Ore Price Forecast

0.0

50.0

100.0

150.0

200.0

250.0

1994

1996

1998

2000

2002

2004

2006

2008

2010

f20

12f

2014

f20

16f

2018

f20

20f

US

¢/D

MTU

Fines Lump Blast Furnace Pellets Direct Reduction Pellets

Premiums :Lump 1.25xBFP 1.65xDRP 1.82x

Source: JCI


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Our forecast is conservative in nature, projecting a 20% decrease in the benchmark price for 2009, and incorporates a further 5% decrease in the benchmark for the subsequent three years. Our long-term benchmark price is US$0.922/DMTU, which is slightly higher than the 2007 price of US$0.815/DMTU. Our conservatism is highlighted by the fact that the benchmark price has never had four consecutive years of price decreases. Of course, our forecast will be updated to reflect 2009 benchmark pricing as soon as it has been announced.

VALUATION AND RECOMMENDATION We are initiating coverage on Labrador Iron Mines Holdings Limited with a SPECULATIVE BUY recommendation, an ABOVE AVERAGE risk rating and a 12-month target price of C$2.35/fd share. From the current price of C$0.67 this represents a potential return of over 250%!

Based on our outline of LIM’s Schefferville Project development and timeline, described above, we have created an after tax discounted cash flow model. We have adjusted and applied our estimates of timing of development milestones, required CAPEX, operating cost and pricing assumptions to those provided by management and cautiously remind the reader that neither an NI43-101 preliminary assessment nor a feasibility study has been completed.

Our estimate of operating costs is, on a relative basis, high when compared to the estimated operating costs of New Millennium Capital Corp.’s (TSXV-NML) DSO project and Consolidated Thompson Iron Mines’ (TSX-CLM) planned production from the Labrador Trough. The high operating costs are to be expected, as LIM anticipates utilizing contractors for the majority of the mining process, and are offset by the reduction in required initial CAPEX. This allows the project to be brought into production with less capital during the start-up phase. We currently project that LIM will not require additional funding to finance production start-up and will have approximately C$8 million at calendar year end 2009 to fund working capital requirements.

JCI Estimate of Schefferville Project Operating Costs

Operating Cost Assumptions

Life of Mine Average

C$

Per Tonne of Ore Mined

Per Tonne of Iron Ore

ProductMining and haulage per tonne ore mined 8.90 8.90 11.48Processing and loading per tonne ore processed 6.95 6.95 8.97Transportation per tonne of iron ore product 8.97 13.80 17.80G&A per tonne of iron ore product 1.75 1.36 1.75Royalty per tonne iron ore product 1.50 1.16 1.50

Total operating cost per tonne of material mined 14.27Total operating cost per tonne of ore mined 32.16 32.16Total operating cost per tonne of iron ore product 41.50 41.50

Source: JCI

Based on our current metal price forecast and foreign exchange assumptions:

Our NAV15% of LIM is C$211 million or C$4.36/fd share. Given the level of uncertainty, provided that neither a NI43-101 preliminary assessment nor a feasibility study has been prepared, we have applied a 0.8x discount to our NAV15% resulting in a value of C$169 million or C$3.49/fd share.

Applying a 5.0x multiple to each of calendar 2011-2013 earnings and discounting to present at 15% suggests a target of C$1.72/fd share.


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Applying a 3.0x multiple to each of calendar 2011-2013 operating cash flow and discounting to present at 15% indicates a target of C$1.82/fd share.

Taking the arithmetic average of these valuation methodologies we arrive at our 12-month target price of C$2.35/fd share.

12-Month Target Price Valuation Methodology

Labrador Iron Mines C$/fd share Multiple C$/fd shareNAV15% $4.36 0.8 x $3.49EPS (Average Calendar 2011-2013) $0.34 5.0 x $1.72CFPS (Average Calendar 2011-2013) $0.61 3.0 x $1.82

C$2.34

12-Month Target C$2.35/fd share

Source: JCI

Our pro forma revenue and income statements are provided in Appendix B.

The following table indicates the sensitivity of our 12-month target price to changes in assumed iron ore prices and the discount rate applied to the Schefferville Project. The iron ore prices have been flatlined through our model over the life-of-mine. We continue to apply the historical relationship of lump ore product priced at an approximate 1.25x premium to fines (i.e. base case US$0.9220 per DMTU of fines and US$1.1525 per DMTU of lump ore).

Target Price Sensitivity to Iron Ore Price and NAV Discount Rate (C$/FD Share)

Iron Ore Price

16.92$ -20.0% -15.0% -10.0% -5.0%US$0.922 per

DMTU +5.0% +10.0% +15.0% +20.0%

8.0% $1.52 $2.00 $2.46 $2.92 $3.37 $3.81 $4.26 $4.71 $5.16

9.0% $1.41 $1.87 $2.30 $2.73 $3.15 $3.57 $3.99 $4.41 $4.83

10.0% $1.31 $1.75 $2.15 $2.56 $2.96 $3.35 $3.75 $4.14 $4.54

12.0% $1.16 $1.55 $1.91 $2.28 $2.64 $2.99 $3.34 $3.70 $4.05

15.0% $0.98 $1.32 $1.64 $1.96 $2.27 $2.58 $2.89 $3.20 $3.50

16.0% $0.93 $1.26 $1.57 $1.88 $2.18 $2.47 $2.77 $3.06 $3.36

17.0% $0.89 $1.21 $1.51 $1.80 $2.09 $2.37 $2.66 $2.94 $3.23

18.0% $0.85 $1.16 $1.45 $1.74 $2.01 $2.28 $2.56 $2.83 $3.11

19.0% $0.82 $1.12 $1.39 $1.67 $1.94 $2.20 $2.47 $2.73 $3.00

NA

V D

isco

unt R

ate

Source: JCI

KEY INVESTMENT RISKS Labrador Iron Mines is a development company without any operating mines, and it will continue to rely on the capital markets for financing, if required. If the development of LIM’s project proceeds as expected, a small amount of cash flow from operations might be achieved in calendar Q4/09. The fact that LIM


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appears to have adequate cash on hand to bring its Phase 1 deposits through to production serves to mitigate this risk.

Project Risk – LOW: LIM’s direct shipping ore project basically consists of a brownfield expansion. Many of the Phase 1 pits have been stripped, ready to be mined. Access roads into the area remain in very good condition and access to the pits is not in question. There already exists a rail link between Schefferville and Labrador City, which eventually will need to be upgraded. LIM expects that the TRT will upgrade the rail line on an ongoing basis as production is ramped up.

Financial Risk – LOW: LIM has taken a “light-weight” approach to the project and plans to utilize existing infrastructure and contract mining to basically eliminate most of the capital expenditure required to bring the mine to production. It raised all the capital it believes necessary to bring the project to production in mid-2009. It currently has adequate cash on hand and envisions no further financing required to achieve Phase 1 production.

Economic Risk – MEDIUM: In the last five years (since 2003), the iron ore benchmark price was up over 330%; 65% this year over last. However, the outlook for iron ore benchmark pricing has recently turned negative compared to earlier this year. Nearly 100% of all iron ore produced is used in the steel making industry, and 2008 has seen significant cuts to steel output. There are two significant cuts to be considered:

China, the world’s largest steel producing country, accounting for 36% of steel manufacturing, reports that it has cut steel output by 20%.

ArcelorMittal, by far the world’s largest steel making company, has recently cut its steel output by 30%. This cut alone is greater than the total output of the number two steel producer, Nippon Steel.

Earlier in 2008, consensus for 2009 pricing appeared to be an increase of approximately 30%. However, production cuts in steel making have tempered this outlook, and consensus estimates for 2009 benchmark pricing have moderated to anywhere from flat (i.e. 0% increase) to a decrease of 20%. Taking a positive view, even a 20% decrease in benchmark pricing in 2009 still means that iron ore prices would have increased 250% since 2003, and even this price is very positive for the Schefferville Project. However, annual iron ore benchmark price negotiations are highly dependent on the steel making industry, which in turn is highly correlated to the world economic situation.


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APPENDIX A – MANAGEMENT AND BOARD OF DIRECTORS John F. Kearney, Chairman and Chief Executive Officer

Mr. Kearney has over 30 years’ experience in the mining industry. He is currently the Chairman of Canadian Zinc Corporation, Conquest Resources Limited, Xtierra Inc. and Anglesey Mining plc. and President, CEO and Director of Sulliden Exploration Inc. In addition, Mr. Kearney is currently a Director of Avnel Gold Mining Limited and Minco plc. Previously, he was Chairman, President and CEO of Northgate Exploration Limited, Campbell Resources Inc. and Sonora Gold Corp. He also currently serves as a Director of the Mining Association of Canada. Mr. Kearney holds degrees in law and economics from University College Dublin and an M.B.A. from Trinity College Dublin.

Bill Hooley, Director, President and Chief Operating Officer

Mr. Hooley is currently Executive Director of Anglesey Mining plc. From 2000 to 2005, he was the Managing Director of Micon International Ltd. He held various management and executive posts with mining and service companies in the UK and Australia from 1975 to 1999. Mr. Hooley is a professionally qualified mining engineer and has 40 years of experience in the world-wide mineral industry. He holds a degree in mining engineering from the Royal School of Mines, Imperial College London.

Danesh K. Varma, Director and Chief Financial Officer

Mr. Varma is a chartered accountant in Canada, England and Wales, with over 30 years’ experience in international finance and mining. He is currently a Director of Anglesey Mining plc, Xtierra Inc. and Minco plc. In addition, Mr. Varma serves as the CFO of Minco plc and Conquest Resources Limited. Previously, he was President of Westfield Minerals Limited and a Director of Northgate Exploration Limited.

Terence N. McKillen, Director and Vice President

Mr. McKillen is a professional geologist and has 40 years of experience in the mining industry. He holds degrees in geology from the University of Dublin (Trinity College) and a Masters degree in mining geology and mineral exploration from the University of Leicester. He is a registered Professional Geoscientist in the Provinces of Ontario and Newfoundland and Labrador. Mr. McKillen is currently Director, President and CEO of Conquest Resources Limited and CEO of Minco plc. He was formerly Vice-President Exploration of Northgate Exploration Limited and Vice President Exploration and Development of Campbell Resources Inc. He was Director, President and CEO of Rift Resources Ltd. and Director of EXP Resources Inc.

Gerald J. Gauthier, Director

A professional mining engineer (P. Eng.) with over 30 years’ experience in Canada, Africa, the U.S.A. and Mexico, Mr. Gauthier holds a B.Sc. in mining engineering from Queen's University. He is presently the COO of Xtierra Inc. and has held senior management positions with Nevsun Resources Inc., Conquest Resources Limited, Glencairn Gold Inc., United Keno Hill Mines Limited and Santa Cruz Gold Inc. From 1987 to 1994, Mr. Gauthier was Senior Vice President North American Operations for Lac Minerals Ltd. From 1979, he was employed by Lac Minerals as Manager of various Canadian mines including General Manager of the Page Williams gold mine at Hemlo, Ontario. He remains a Director of Conquest Resources Limited.


17

The information contained in this report was obtained from sources we believe to be reliable. We do not represent that such information is accurate or complete and it should not be relied on as such. Any opinions expressed herein reflect our judgment at this date and are subject to change. Jennings Capital Inc. and/or employees from time to time may hold shares, options or warrants on any issue included in this report and may buy or sell such securities. This report is not to be construed as an offer to sell or solicitation to buy securities. Member – CIPF. Jennings Capital (USA) Inc. is a member of SIPC.

Matthew Coon Come, Director

Mr. Coon Come is a Board Member of the Grand Council of the Crees (Eeyou Istchee) and the Cree Regional Authority. He was National Chief of the Assembly of First Nations from 2000 to 2003 and previously was Grand Chief of the Grand Council of the Crees in Québec for 12 years from 1987 to 1999. Earlier, he served two terms as Chief of the Mistassini First 66 Nation. Mr. Coon Come is a Founding Member of the Board of Compensation of the Cree Nation and has been a Director of Creeco; AirCreebec, Cree Regional Intercompany Enterprise Company and Cree Construction Company and Chairman of Cree Housing Corporation and James Bay Native Development Corporation. He was a founding Director of the First Nations Bank of Canada. In 1998, he was awarded the Goldman Prize (Environmental Award) in recognition of his leadership in northern Québec.

Richard Lister, Director

Dr. Lister has over 40 years of experience in the mining, metallurgical and chemical industries. He has served as President and CEO of Zemex Corporation, Vice Chairman of Dundee Bancorp Inc. and Chairman and President of Campbell Resources Inc. Dr. Lister holds the degrees of Bachelor of Science, Master of Science and Doctor of Philosophy from the University of Toronto. Dr. Lister was also a Director of Timminco Limited and Tiberon Minerals Ltd.

Eric W. Cunningham, Director

Mr. Cunningham has been engaged as an independent mining consultant since 1996. He has been a Director of Aurora Energy Resources Inc. since April 2006 and was formerly a Director of Viceroy Exploration Ltd. Mr. Cunningham was the joint owner of the Golden Kopje Mine in Zimbabwe from 1997 to 2001 and General Manager and Director of Trillion Resources Inc. He also was Manager of Wright Engineers and held various positions with Sherritt Gordon Mines. Mr. Cunningham holds a B.Sc in Geology from Rhodes University in South Africa. Source: Labrador Iron Mines

APPENDIX B – PRO FORMA REVENUE AND INCOME STATEMENT Labrador Iron Mines Holding Ltd.Pro Froma Revenue and Income Statement (000s C$ - Unless Otherwise Stated)

CALENDAR YEAR ESTIMATES - FYE: Mar-312010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

ProductionMaterial Mined (000 tonnes) 2,581 5,161 7,742 7,742 7,742 7,742 10,323 16,129 19,355 19,355 19,355Waste Material (000 tonnes) 1,290 2,581 3,871 3,871 3,871 3,871 5,161 9,677 11,613 11,613 11,613Strip Ratio 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.5 1.5 1.5 1.5Ore Mined (000 tonnes) 1,290 2,581 3,871 3,871 3,871 3,871 5,161 6,452 7,742 7,742 7,742Lump (% of Production) 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 25.0% 25.0% 25.0% 25.0%Processing Loss 22.5% 22.5% 22.5% 22.5% 22.5% 22.5% 22.5% 22.5% 22.5% 22.5% 22.5%Lump Ore (000 tonnes) 200 400 600 600 600 600 800 1,250 1,500 1,500 1,500Fine Ore (000 tonnes) 800 1,600 2,400 2,400 2,400 2,400 3,200 3,750 4,500 4,500 4,500Total Product (000 tonnes) 1,000 2,000 3,000 3,000 3,000 3,000 4,000 5,000 6,000 6,000 6,000

Upgraded Iron Units (Fe %) 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65%Moisture Content (%) 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%Lump Ore (000 DMTUs) 12,740 25,480 38,220 38,220 38,220 38,220 50,960 79,625 95,550 95,550 95,550Fine Ore (000 DMTUs) 50,960 101,920 152,880 152,880 152,880 152,880 203,840 238,875 286,650 286,650 286,650

RevenueLump Ore Price (US$ per DMTU) 1.2775 1.2125 1.1525 1.1525 1.1525 1.1525 1.1525 1.1525 1.1525 1.1525 1.1525Lump Ore (000 DMTUs) 12,740.00 25,480.00 38,220.00 38,220.00 38,220.00 38,220.00 50,960.00 79,625.00 95,550.00 95,550.00 95,550.00Lump Ore Revenue (US$ 000s) 16,275.35 30,894.50 44,048.55 44,048.55 44,048.55 44,048.55 58,731.40 91,767.81 110,121.38 110,121.38 110,121.38

Fine Ore Price (US$ per DMTU) 1.0220 0.9700 0.9220 0.9220 0.9220 0.9220 0.9220 0.9220 0.9220 0.9220 0.9220Fine Ore (000 DMTUs) 50,960.00 101,920.00 152,880.00 152,880.00 152,880.00 152,880.00 203,840.00 238,875.00 286,650.00 286,650.00 286,650.00Fine Ore Revenue (US$ 000s) 52,081.12 98,862.40 140,955.36 140,955.36 140,955.36 140,955.36 187,940.48 220,242.75 264,291.30 264,291.30 264,291.30

Gross Revenue (US$ 000s) 68,356 129,757 185,004 185,004 185,004 185,004 246,672 312,011 374,413 374,413 374,413C$:US$ Exchange 0.88 0.90 0.92 0.92 0.92 0.92 0.92 0.92 0.92 0.92 0.92Gross Revenue 77,414 144,030 201,654 201,654 201,654 201,654 268,872 340,092 408,110 408,110 408,110

Operating CostsMining and Haulage 11,484 22,968 34,452 34,452 34,452 34,452 45,935 57,419 68,903 68,903 68,903Processing and Loading 8,968 17,935 26,903 26,903 26,903 26,903 35,871 44,839 53,806 53,806 53,806Transportation (and Unloading, Storage, Shipping) 17,800 35,600 53,400 53,400 53,400 53,400 71,200 89,000 106,800 106,800 106,800G&A 1,750 3,500 5,250 5,250 5,250 5,250 7,000 8,750 10,500 10,500 10,500Royalties 1,500 3,000 4,500 4,500 4,500 4,500 6,000 7,500 9,000 9,000 9,000Operating Costs 41,502 83,003 124,505 124,505 124,505 124,505 166,006 207,508 249,010 249,010 249,010

Head Office and Exploration 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000

EBITDA 31,912 57,027 73,149 73,149 73,149 73,149 98,866 128,583 155,100 155,100 155,100

Depreciation/Depletion/Amortization 9,182 14,589 17,242 13,994 11,631 10,109 12,431 13,875 14,557 12,763 12,902EBIT 22,731 42,438 55,907 59,156 61,518 63,040 86,435 114,709 140,543 142,337 142,199

Interest 0 0 0 0 0 0 0 0 0 0 0

Taxes (Income and Mining)Current (Recovery) 0 7,442 19,865 23,186 25,667 27,345 40,178 54,702 68,039 68,894 69,835Future Increase (Decrease) 9,992 11,212 4,710 2,817 1,374 365 (2,185) (4,280) (6,261) (6,328) (7,330)

9,992 18,654 24,575 26,003 27,041 27,710 37,994 50,422 61,778 62,566 62,505

Net Income 12,739 23,784 31,332 33,153 34,477 35,330 48,441 64,287 78,765 79,771 79,693

EPS FD 0.26 0.49 0.65 0.68 0.71 0.73 1.00 1.33 1.63 1.65 1.65CFPS FD 0.66 1.02 1.10 1.03 0.98 0.95 1.21 1.53 1.80 1.78 1.76

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Jennings Capital Inc. Research Disclosures

Company Ticker Labrador Iron Mines Holdings Limited TSX-LIR

I, Peter Campbell, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report. Note: This is our initiating coverage report on Labrador Iron Mines Holdings Limited.

U.S. Client Disclosures

This research report was prepared by Jennings Capital Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund and a Participating Organization of the Toronto Stock Exchange and the TSX Venture Exchange. Jennings Capital Inc. is an affiliate of Jennings Capital (USA) Inc. Jennings Capital (USA) Inc. accepts responsibility for the contents of this research report, subject to the terms and limitations as set out above. Jennings Capital (USA) Inc. is a registered broker-dealer with the Securities and Exchange Commission and a member of the National Association of Securities Dealers Inc. THE FIRM THAT PREPARED THIS REPORT MAY NOT BE SUBJECT TO U.S. RULES WITH REGARD TO THE PREPARATION OF RESEARCH REPORTS AND THE INDEPENDENCE OF ANALYSTS. This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein. Any transaction in these securities by U.S. persons must be effected through either Westminster Securities Corporation, a U.S. broker-dealer registered with the Securities and Exchange Commission and a member of the National Association of Securities Dealers Inc. and the New York Stock Exchange Inc. or through Jennings Capital (USA) Inc., A U.S. broker-dealer registered with the Securities and Exchange Commission and a member of the National Association of Securities Dealers Inc. U.S. Persons This research report was prepared by an affiliate of Jennings Capital (USA) Inc. or other person that may not be registered as a broker-dealer in the United States. The firm that prepared this report may not be subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. Subject to the limitations on liability described above, Jennings Capital (USA) Inc. takes responsibility for the content of this research report in accordance with Rule 15a-6 under the U.S. Securities Exchange Act of 1934, as amended. All transactions by U.S. persons in securities discussed in this report must be performed through Jennings Capital (USA) Inc.

U.K. Client Disclosures

This research report was prepared by Jennings Capital Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund and a Participating Organization of the Toronto Stock Exchange and the TSX Venture Exchange. JENNINGS CAPITAL IS NOT SUBJECT TO U.K. RULES WITH REGARD TO THE PREPARATION OF RESEARCH REPORTS AND THE INDEPENDENCE OF ANALYSTS. The contents hereof are intended solely for the use of, and may only be issued or passed on to persons described in part VI of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001. This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein.

Stock Ratings Speculative Buy: The stock is expected to provide a total return in excess of 10% over the current trading price over the next 12 months; however, there is material event risk associated with the investment. Buy: The stock is expected to provide a total return in excess of 10% over the current trading price over the next 12 months. Hold: The stock is expected to provide a total return of 0% to 10% over the current trading price over the next 12 months. Sell: The stock is expected to provide a negative total return over the next 12 months.

Risk Ratings

Low/Average Risk — Stocks with less volatility than the market as a whole, with solid balance sheets and dependable earnings.

Above Average Risk — Stocks with more volatility than the market. Financial leverage is considerable but not threatening, earnings are more erratic, or other quality concerns regarding accounting, management track record, and similar issues.

Speculative — Stocks of unproven companies or ones with very high financial leverage, suspicious accounting, or with other significant quality concerns. A speculative risk rating implies at least the possibility of financial distress leading to a restructuring.

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Distribution Ratings: Out of approximately 45 stocks in the Jennings Capital Inc. coverage universe, the ratings distribution is as follows:

BUY 36%SPECULATIVE BUY 58%HOLD 2%RESTRICTED 2%UNDER REVIEW 0%SELL 2%

Revised Monthly Security Abbreviations: NVS (non-voting shares); RVS (restricted voting shares); RS (restricted shares); SVS (subordinate voting shares); MV (multiple voting shares).

Quarterly Recommendation Hierarchy: Is a ranking distribution identifying the percentage of total, number, and the investment banking relationship (%) for all recommendation categories that can be found on the Jennings Capital Inc. website (www.JenningsCapital.com).

Analyst Stock Holdings: Equity Research analysts, associates and members of their households are permitted to invest in securities covered by them. No Jennings Capital Inc. analyst, associate or employee involved in the preparation of an analyst report is permitted to effect a trade in the security of an issuer whereby there is an outstanding recommendation for a period of 30 calendar days before and 5 calendar days after issuance of the research report

Compensation: The compensation of the analyst and/or associate who prepared this research report is based upon in part, the overall revenues and profitability of Jennings Capital Inc. Analysts are compensated on a salary and bonus system. Some factors affecting compensation including the productivity and quality of research, support to institutional, retail and investment bankers, net revenues to the equity and investment banking revenue as well as compensation levels for analysts at competing brokerage dealers. Analysts are not directly compensated for specific Investment Banking transactions.

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Jennings Capital Inc. or its officers, employees or affiliates may execute transactions in securities mentioned in this report that may not be consistent with the report’s conclusions.

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Is this an issuer related or industry related publication? Issuer Industry Does the Analyst or any member of the Analyst’s household have a financial interest in the securities Yes No of the subject issuer? If yes, nature of interest: Is Jennings Capital Inc. or Jennings Capital (USA) Inc. a market maker in the issuer’s securities Yes No at the date of this report? Do Jennings Capital Inc., Jennings Capital (USA) Inc. and their affiliates in the aggregate Yes No beneficially own more than 1% of any class of common equity of the issuer? Does Jennings Capital Inc., Jennings Capital (USA) Inc. or the Analyst have any actual material conflicts Yes No of interest with the issuer? Explanation: Does the Analyst or household member serve as a Director or Officer or Advisory Board Member of Yes No the issuer? Has the Analyst received any compensation from the subject company in the past 12 months? Yes No Has Jennings Capital Inc., Jennings Capital (USA) Inc. and/or any affiliates managed or Yes No co-managed an offering of securities by the issuer in the past 12 months? Has Jennings Capital Inc., Jennings Capital (USA) Inc. and/or any affiliates received compensation for Yes No investment banking and related services from the issuer in the past 12 months? Has the Analyst had an onsite visit with the Issuer? Yes No (The extent to which the analyst has viewed the material operations is available on request) Has the Analyst ever been compensated for travel expenses incurred as a result of an onsite visit with an Issuer? Yes No

NOTES:

NOTES:

NOTES:

T: 403.292-0970 F: 403.292.0979 Toll free: 1.888.292.0980

T: 416.214.0600 F: 416.214.0177 Toll free: 1.877.214.3303

T: 403.292.9328 F: 403.292.9329 Toll free: 1.877.292.0970

T: 416.304-2190 F: 416.304.2195 Toll free: 1.866.319.2573

Private Client Services-313, 1 St. W. PO Box 5519, High River, AB T1V 1M6 T: 403.652.4032 F: 403.652.4278

Private Client Services-100, Pedway Level, Barrington Place, 1903 Barrington St., Halifax, NS B3J 3L7 T: 902.496.7580 F: 902.496.7599 Toll free: 1.800.565.8660

INSTITUTIONAL RESEARCHSales Gold/Base MetalsG. Peter Taylor, President, CEO 416.214.0600 Ron Coll, Head of Research [email protected] [email protected] Barootes, Sr. VP, Sales 416.214.0600 Stuart McDougall, B.Sc. [email protected] [email protected] Betts 416.214.0600 Peter Campbell, [email protected] [email protected] 416.304.3963Diane Braxatoris, B. Math 416.214.0600 Oil & [email protected] Gregory Chornoboy, B.Sc., P.Eng., MBA 403.292.9485Robert Carmosino 416.304.2184 [email protected]@jenningscapital.com David Ricciardi, CFADenny Creighton 416.214.0600 [email protected] [email protected] Special SituationsGordon Fernandes 416.214.0600 Russell Stanley, CFA, MBA [email protected] [email protected] Koci, MBA, CFA 416.214.0600 Ken Chernin [email protected] [email protected] Robinson, CFA [email protected] Research AssociatesSales Support Lai Chen, CFA 403.262.0902Lisa Fidale 416.214.0600 [email protected]@jenningscapital.com Marc Charbin, CA

[email protected] 416.304.2191Mark Turner, B.A.Sc., MBA

Trading [email protected] 416.304.3964David Lawson, Branch Manager 416.214.0600 Research [email protected] P. Lorelei Reid 416.304.2175Kate Branscombe 416.214.0600 [email protected]@jenningscapital.comLarry Farrell, Head Trading [email protected] CORPORATE FINANCETim Fisher 416.214.0600 Robert G. Jennings, CFA, Chairman & CEO [email protected] Daryl Hodges, M.Sc. 416.304.2174James McKnight 416.214.0600 Sr. Managing Director-Head of Corporate [email protected] [email protected] Sellon 416.214.0600 David McGorman [email protected] Sr. Managing Director - Corporate FinanceTrading Support [email protected] Swaby [email protected]

Capital Markets Manager PRIVATE CLIENT SERVICESCathi Muncaster Sam Collins, Sr. VP, Private Client Services [email protected] 416.304.3965 [email protected]

Jennings Capital research is available on Bloomberg, Reuters, Thomson Financial and at www.jenningscapital.com

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LABRADOR IRON MINES Recommendation: SPECULATIVE BUY ... Report.pdf · COMPANY OVERVIEW 3 PROJECT DETAILS 4 Ownership History 6 Operational Characteristics 6 Transportation and Infrastructure

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