Labrador Iron Mines Holdings Limited. Provides Update on its Schefferville Area Iron Ore Mining Operations; Provides Capital Expenditure Guidance for the Year 2012; Reaffirms Production Guidance for the Year 2012; Revises Production Guidance for the Year 2013
In response to challenging market conditions and the sharp decline in spot iron ore prices, the company has undertaken a critical review of its capital spending for the balance of 2012 and has implemented the following measures: all capital expenditure programs relating to the Silver Yards processing plant and development of the Houston deposits have been deferred; the 2012 exploration program has been reduced to $5 million from the original budget of $8.6 million; about $52 million of planned capital investment has been deferred into 2013 in order to prudently manage the company's cash resources and requirements. The company's original 2012 budget for its capital investment programs totalled approximately $112 million, of which $54 million has been spent or committed to date and $6 million has been permanently cancelled.
The company remained on track to meet its sales target of 2 million tonnes of iron ore in 2012.
The delay in the development of Houston is currently expected to result in the company's production target for 2013 being revised to a level similar to 2012, at about 2 million tonnes of iron ore, rather than the expanded 3 million tonnes previously anticipated.