Labrador Iron Mines Holdings Limited. provided an update on its Schefferville Area iron ore mining operations. Three shipments of iron ore sold in August 2012 totalling approx. 520,000 wet tonnes. Year to date, the company has now sold seven shipments totalling 1.2 million wet tonnes of iron ore. In August 2012, 275,000 wet tonnes were railed to the Port of Sept-Iles bringing the year to date total rail volume to 1.1 million wet tonnes. The James mine operated at a rate of 28,000 tonnes per day (ore and waste) during August. The ore in the James deposits continues to be soft and higher grade and lends itself to simple processing that does not require washing. Consequently, for the balance of 2012, LIM plans to utilize its new lower cost dry classifying system to produce lump and sinter and will not use the higher cost wet processing plant, which is now being winterised. The dry process stream has a design capacity of 1,000 tonnes per hour (20,000 tonnes per day) with a mass yield approaching 100%.

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.