Last checked at 10 Mar 2011 12:26
10 March 2010 LSE:AYM
LIM Signs Rail Transportation Agreement with QNS&L
Anglesey Mining's 41% owned associate Labrador Iron Mines Holdings Limited is pleased to announce that it has entered into a life of mine Confidential Rail Transportation Contract with Quebec North Shore and Labrador Railway Company Inc. ("QNS&L"), a wholly owned subsidiary of the Iron Ore Company of Canada, for the transportation of iron ore from LIM's DSO iron ore projects near Schefferville.
The Contract provides that QNS&L will carry LIM's iron ore from Emeril Junction, Newfoundland and Labrador, to Sept-ÈŠles Junction, Quebec, on the QNS& L Railway. The QNS&L Railway already carries iron ore for each of the Iron Ore Company of Canada; Wabush Mines and Consolidated Thompson (Cliffs Resources) Bloom Lake Mine. The Port of Sept-ÈŠles is the largest iron ore export port in Canada and in 2010 about 30 million tonnes of iron ore were shipped to customers all over the world.
The Confidential Rail Transportation Contract provides for a confidential tariff, with various capacity and volume commitments on the part of each of QNS &L and LIM. The iron ore will be delivered from LIM's Silver Yards Plant, near Schefferville, to Emeril Junction by Tshiuetin Rail Transportation Inc. ("TSH") (see LIM Press Release dated February 24, 2011).
The haulage railcars will be provided by LIM and the locomotives supplied and operated by QNS&L. LIM has agreed to make advance payments to QNS&L to secure the locomotive equipment and infrastructure capacity to meet LIM's service needs under the Contract. LIM will advance $5 million to QNS&L upon commencement of the Contract, with a further $5 million advance payable in October 2011 and a final advance payment of $15 million in June 2012 to secure the locomotives required to haul LIM's anticipated increases in production and shipment volumes.
These advance payments will be repaid by QNS&L to LIM by means of a special credit of $3.50 per tonne against all tonnes hauled, commencing July 2012, until all advance payments have been repaid in full.
John Kearney, Chairman and Chief Executive of Labrador Iron Mines Holdings Limited said: "We are very pleased to have signed a life of mine rail transportation contract with QNS&L which, together with our recent agreement with TSH Rail, will ensure transportation for LIM's iron ore to the Port of Sept Iles."
"Signing of this rail transportation agreement is a significant milestone in the development of our Schefferville Area iron ore projects in western Labrador and northeastern Quebec and we look forward to a long term business relationship with QNS&L, the major rail transport operator of most of the iron ore in the Labrador Trough," added Mr. Kearney.
About Labrador Iron Mines Holdings Limited (LIM)
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.
Labrador Iron Mines contemplates mining in stages, the first phase of Stage 1 comprising the James and Redmond deposits, which are located in close proximity to existing infrastructure, and for which all operating permits have been issued and plant construction and mine development is nearing completion.
For further information, please view www.labradorironmines.ca
About Anglesey Mining plc
Anglesey Mining with its LSE main board listing is primarily focused on its 41% interest in Labrador Iron Mines . In addition to any new projects that may be brought forward the company owns 100% of Parys Mountain in North Wales with an historical resource in excess of 7 million tonnes at over 9% combined copper, lead and zinc.
For further information, please contact:Bill Hooley, Chief Executive +44 (0) 1492 541981Ian Cuthbertson, Finance Director +44 (0) 1248 361333Emily Fenton / Charlie Geller,Tavistock Communications +44 (0) 20 7920 3155 / +44 (0) 7788 554035
vendor