Labrador Iron Mines Ships First Shipment of Ore to Chile

Labrador Iron Mines Ships First Shipment of Ore to Chile

By: Tomas Ronolski - AllPennyStocks.com News

Friday, June 7, 2013

Falling commodity prices have sustained pressures on resource stocks in 2013. The pressures have stemmed from global factors, including slow manufacturing in the United States, the ongoing recession in Europe and data from China showing deceleration in economic growth. Industrial metals, like iron and copper, are particularly sensitive to growth in China as a leading importer of metals. Metal investors have felt the pain in companies big and small, including those longs holding Labrador Iron Mines Holdings Limited (TSX:LIM), a mineral resource company exploring and mining iron ore projects in Canada. Shares of the Toronto-based miner are down about 83 percent in the last 52 weeks from around $3.00 to current levels in the area of 50 cents.


Shares are trying to put together a bounce on Friday on news that Labrador Iron has sent its first shipment of iron ore in 2013. The company said that 174,360 wet metric tonnes of its iron ore have set sail on the JK Pioneer from the Port of Sept-Îles, bound for China. The load is part of a new two-year iron ore sales agreement between Labrador Iron and Ore Company of Canada that was announced on May 14. Iron Ore Company of Canada is selling the ore to RB Metalloyd Limited through a take-off agreement.

Iron Ore Company of Canada is scheduled to pay Labrador Iron progressively as the iron is resold based on average monthly prices for the market, adjusted for quality, premiums and certain costs.

The shipment is sinter fines largely comprised of stockpiled material at Labrador Iron’s James mine and some port inventory at an average grade of about 58 percent iron. Additional shipments during the year will consist of sinter fines and lump ore at a planned grade of 62 percent iron, according to the company. For 2013, Labrador Iron forecasts total saleable iron ore production for 2013 in the range of 1.75 million to 2.0 million tonnes.

Labrador Iron has restarted its Silver Yards wet processing plant as it undergoes upgrades and expansion. The plant will ramp up to its design capacity by the end of June and will operate in conjunction with a dry plant, which has been processing iron ore since April.

"Now that the Silver Yards wet plant is operating, we expect to accelerate our production, railing and shipping and look forward to a solid year of operations," said John Kearney, chairman and chief executive at Labrador Iron Mines.

Investors will be looking towards the company releasing its fourth quarter and full year ended March 31 on June 27 as it wraps its first full year of production. For the third quarter, Labrador Iron reported revenue of $24.73 million and a net loss of $16.11 million, or 19 cents per share. That was against a net loss of $1.68 million, or 3 cents per share, in the year prior quarter, but the company was not generating sales at that time. Going forward, more comparable quarters will help define corporate growth.

During the third quarter, Labrador Iron sold three shipments of iron ore totaling 425,500 dry tonnes. For the 2012 year, the company previously forecast a total of 1.7 million wet tonnes (1.6 million dry tonnes) or iron ore.

Shares of LIM dipped as low as 47 cents this week, but are holding that spot as a short-term area of support. With the news on Friday, shares are up about 5 percent at 50 cents.

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