Tata Steel gives Labrador Iron Mines a $30 million cash injection
Labrador Iron Mines (TSX:LIM) is receiving C$30 million from Tata Steel in return for a 51% interesting in LIM's Howse deposit.
The strategic relationship was announced yesterday. Tata and LIM both operate iron ore projects in the Labrador Trough. Labrador Iron Mines said the deal will allow both companies to rationalize operations and cooperate. Both companies plan to share the same rail and port infrastructure.
Other parts of the deal allow LIM to acquire a 100% interest in Tata's Timmins 4 deposit, located about two kilometres from Howse, at a consideration of $3 million
payable from sales of Timmins 4 ore at $2 per tonne. Tata can increase its interest in Howse to 70% for $25 million.
According to LIM's website, the Howse 1 deposit is located about 25 km northwest of Schefferville with access by way of an all-season road and 700 metre trail to the deposit itself. A network of trails and secondary dirt roads provides access to the remaining area. The overburden on the site is thicker than any of LIM's other deposits.