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Quebec Innu communities agree to remove barriers for Labrador Iron Mines` iron ore projects

Published: 05:12 04 Sep 2010 AEST

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Iron ore company Labrador Iron Mines Holdings (TSX:LIM) has reached an agreement with Innu Matimekush-Lac John to immediately remove the barriers that had restricted normal access from the town of Schefferville to adjacent mining properties, thereby allowing the ongoing development of the company's iron ore projects in Western Labrador and Quebec.

The mining company is up nearly 9% on the news to $5.34, as of 10:15am ET on the Toronto Stock Exchange on Friday.

The agreement followed negotiations between LIM and representatives of the Quebec Innu, including Innu Matimekush - Lac John (Schefferville) and Innu Takuaikan Uashat Mak Mani-Utenam (Sept-Iles), and following discussions and consultations between the Quebec Innu and various governments.

Under the agreement with Innu Matimekush - Lac John, Labrador Iron Mines, together with New Millennium Capital, have committed to jointly support a number of local social activities, including some education, training, health and youth programs and, with government participation, improvements to the community arena facility in Schefferville.

Following the agreement, construction of LIM's iron ore project in Western Labrador will now continue on fast-track. LIM will also further negotiate with the Innu Matimekush-Lac John towards concluding an Impact Benefits Agreement.

"LIM is extremely pleased that, with the co-operation of all three Governments, agreement has been reached with the Quebec Innu paving the way for construction of our project so that commercial production of iron ore can commence in 2011," said chairman and CEO John Kearney.

"We look forward to concluding negotiations on the IBA agreements and to further developing a harmonious and long term working relationship with all of our aboriginal partners for the mutual benefit of all stakeholders."

LIM is now planning to immediately begin ground clearing, along with contractor mobilization, to be followed by civil construction and mechanical erection of the plant in the subsequent weeks. The company expects the beneficiation plant will be fully erected in about 12 weeks.

The mine accommodation camp will also be brought to site and erected some 4 kilometers south-east of the plant site.

During the last several weeks, a significant portion of the infrastructure and beneficiation plant has been transported by rail from a railhead near Labrador City to Schefferville via the TSH aboriginal railroad, which is jointly owned by the two Quebec Innu communities and the Naskapi Nation, the company said.

The construction of the plant and camp and the initiation of mining activities, prior to the onset of the mid-winter, will allow for commercial production in the spring of 2011, according to LIM.

The last two major operating permits, for the operation of the mine and the operation of the rail spur, are expected to be issued shortly by the Government of Newfoundland and Labrador, following a consultation process with potentially affected First Nations.

LIM's Schefferville Area project involves the development of twenty direct shipping iron ore deposits in western Labrador and north-eastern Quebec near Schefferville, Quebec. The company's properties are part of the historic Schefferville area iron ore district where mining of adjacent deposits was previously carried out by the Iron Ore Company of Canada from 1954 to 1982.

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