Excellion Capital acts for Labrador Iron Mines on a $35 million prepay financing and offtake agreement

May 2013

Labrador Iron Mines Holdings Limited (‘LIM’), a Canadian iron ore mining company listed on the Toronto Stock Exchange (TSX: LIM), last week announced its entry into an offtake and financing agreement with RB Metalloyd, a leading international commodity trading firm. Excellion Capital acted for LIM in connection with this milestone transaction.

Under the terms of the financing and offtake agreement, RB Metalloyd advanced a pre-payment of $35 million to LIM which is due to be repaid over the next two years, credited against future deliveries of iron ore during the course of 2013 and 2014. The company expects to deliver a minimum of 3.5 million tonnes during this timeframe. RB Metalloyd has agreed to buy all of LIM’s product on an FOB basis.

The financing provides LIM with important working capital; it is designed to enable the company to ramp up its 2013 iron ore production as well as complete its planned capital investment and improvement programme for the company’s Silver Yards processing plants. In April 2013, LIM commenced its third year of production of direct shipping ore (DSO) from its Schefferville mines located in Western Labrador, Canada. For 2013, LIM is targeting production of 1.75 to 2 million tonnes of sinter fines and lump.

Robert Stafler, co-founder and managing director of Excellion Capital, said: “This is another landmark transaction for Excellion Capital’s Natural Resources franchise. It once again demonstrates Excellion’s ability to originate and close bespoke financing solutions for clients, as well as our strong access to institutional capital.”

About Labrador Iron Mines Holdings Limited

Labrador Iron Mines is Canada’s newest iron ore producer with a portfolio of direct shipping ore (DSO) iron ore operations and projects located in the prolific Labrador Trough. Production commenced in 2011, and LIM’s iron ore sales in 2012 totalled c. 1.6 million dry tonnes of iron ore. LIM recently commenced its third year of operations. The company’s James Mine is connected by a direct rail link to the Port of Sept-Îles, Québec.

Simultaneously with the RB Metalloyd transaction described above, the Company also entered into a new agreement with the Iron Ore Company of Canada (‘IOC’) for the calendar years 2013 and 2014. IOC, whose major shareholder is the Rio Tinto group, owns and operates storage and ore handling facilities at the port of Sept-Îles, as well as the Quebec North Shore & Labrador railway (QNS&L). In 2011, LIM had entered into a life-of-mine rail transportation contract with QNS&L for the transportation of LIM’s product on the QNS&L railway.

For further information regarding LIM, please click here.