09/18/2013 07:15 EDT | Updated 11/18/2013 05:12 EST

Tata, Labrador Iron Mines form joint venture to explore, develop Howse deposit

TORONTO - Labrador Iron Mines Holdings Ltd. (TSX:LIM) and a subsidiary of India's Tata industrial group have formed a joint venture that will speed up development of an ore deposit and new mine in the Schefferville region of the Labrador Trough.

A subsidiary of Tata Steel Minerals Canada, which is 20 per cent owned by New Millennium Iron Corp., (TSX:NML), will contribute up to $53.5 million to acquire up to 70 per cent of the Howse deposit near LIM's main operations in Labrador.

Toronto-based Labrador Iron said it's now aiming to begin developing a new mine in 2015 and begin commercial production of the Howse deposit in 2016, several years sooner than than previously expected.

"We are very pleased to be cooperating with Tata Steel, one of the world's major steel companies, in this venture and we look forward to working with TSMC to advance the Howse project into production," said John Kearney, LIM's chairman and chief executive officer, said in a statement.

He said the joint venture agreement with Tata Steel Minerals Canada Ltd. is an "will significantly fast track the development timeline for this new mine."

TSMC will initially contribute $30 million to receive a 51 per cent interest in the Howse iron ore deposit.

Tata will boost its stake in the joint venture to 70 per cent by contributing a further $23.5 million after LIM completes the exploration program and produces a new resource estimate that complies with Canada's NI 43-101 industry standard.

Labrador Iron Mines has budgeted $5 million for exploration on the property for the 2013 calendar year with the aim of upgrading the resource estimates and completing a feasibility study by next July.