New Mineralized Extension at LIMs Houston Deposits Increases Houston Resource to 20 Million Tonnes

Labrador Iron Mines Holdings Limited is pleased to report a new resource estimate for its 100% owned Houston deposits located in western Labrador following the 2010 exploration drilling program. The new resource estimate of 19,499,000 million tonnes of measured and indicated resources represents a significant increase over previous estimates.

Commenting on the increased resource estimate at the Houston deposits, John F. Kearney, Chairman and CEO of Labrador Iron Mines said, “As a result of theexploration success and this significant increase, the Houston deposits are now of sufficient tonnage to merit evaluation of a stand-alone operation. We are now assessing the development of a new separate “South Central Zone”, with its own dedicated processing plant, which, subject to environmental assessment, permitting and detailed engineering, could be brought into production in 2013 at a rate of 2 to 3 million tonnes per year. This would be in addition to LIM’s existing processing plant at Silver Yards scheduled to start-up in April and which with planned expansions will have a similar design capacity.”

The Houston 1, 2 and 3 deposits comprise 12 mineral rights licenses representing 112 mineral claim units that cover approximately 2,800 hectares, situated 15 km south-east of LIM’s James Mine and Silver Yards processing area and approximately 20 km from the town of Schefferville, Quebec. The Houston deposits form part of the Stage 1 planned production at LIM’s Schefferville area direct shipping iron ore projects.

The new estimate, prepared in accordance with NI 43-101, represents an increase in tonnage of over 25% from the previous NI 43-101 estimate announced in April 2010 and more than double the historical resource (not NI 43-101 compliant) previously estimated by the Iron Ore Company of Canada (IOC) prior to 1982. The new resource also includes about one million tonnes of manganiferous ore (Mn) grading about 54.4% Fe and 5% manganese.

The updated resource estimate for the Houston deposits are based on an additional 1,804 metres of drilling in 26 holes and 625 samples carried out by LIM in 2010. The majority of the additional resource has resulted from the drilling of a new mineralized zone located between the Houston 1 and 2 deposits, as well as infill drilling within the deposit outlines during 2010. The Houston deposits remain open along strike particularly to the southeast and further drilling is planned on Houston 3 during 2011.

The classification of resources was completed using the results of drilling and trenching carried out by LIM during the 2006 to 2010 field seasons, which comprised twinning, in-fill and step-out drilling and trenching, as well as drill and trench data previously obtained by IOC.

Block Modeling

LIM used Gemcom GEMS 6.4.2.1 software for the resource estimation. The ordinary kriging interpolation method was used to estimate the resources by block modeling with block sizes of 5x5x5 metres and block rotation of 45.6 degrees which matches with the general strike of the deposit. LIM used the geological and ore models interpreted in plane and in sections. LIM used different search ellipses derived from 3D semi-variogram analyses for the classification of the resources.

Analyses

Analyses for all of the samples from the 2006 to 2010 drilling and trenching programs were carried out by SGS- Lakefield Laboratory and Activation Laboratories. The analytical method used was borate fusion whole rock X- Ray Fluorescence.