Photo by: Reuters
TORONTO (miningweekly.com) – Seasonal iron-ore miner Labrador Iron Mines (LIM) this week said in the face of a 30% drop in 62% iron-content iron-ore prices from January to June, it had not started mining operations this summer season, opting instead to focus on development activities.
The company, which owns a portfolio of 20 direct shipping deposits located in the prolific Labrador Trough, early this year said to restart mining from its Phase 1 deposits, including the James mine where grades last year declined, it would need about C$30-million in additional capital to be able to successfully restart mining during the 2014 season.
Despite hitting its 1.7-million in iron-ore sales guidance for 2013, at the time the miner reported that the ore sold was lower in value than in previous years owing to lower grades and a higher-silica content.
LIM on Thursday added that it did not conduct any mining operations during the fiscal first quarter ended June and carried out only a limited number of standby activities at site. The miner needs to raise capital to cover a working capital deficit and to fund development of the Houston project.
For the first quarter, LIM reported a net loss of $4-million, or $0.03 a share, which included a depletion and depreciation charge of $1.3-million, or $0.01 a share.
LIM's current focus is on developing the Houston mine and, subject to completing financing, plans to be in a position to begin production from Houston in 2015.
LIM is also focusing on negotiating the commercial terms of major contracts and seeking more capital investment and working capital.
During the quarter, the Howse exploration programme was restarted, targeting an additional 3 500 m of drilling. The remaining $1.8-million commitment for the 2014 exploration programme was fully funded.
LIM is also carrying out the expansion of the Silver Yards rail siding, which is the only capital project currently under way. The project is fully funded by offtake partner Tata Steel Minerals Canada.
LIM’s TSX-listed stock has taken a battering in the last six months, shedding 68% in value. On Friday morning, the stock traded at C$$0.07 apiece.