Labrador Iron in deal with India's Tata Steel, shares soar

Tue Mar 12, 2013 10:19am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* C$30 mln deal includes 51 pct stake in Howse project

* Companies to coordinate on logistics, potential off-take

* Will share rail, port infrastructure

* Labrador Iron shares rise 20 pct to C$0.78 on TSX

TORONTO, March 12 (Reuters) - Labrador Iron Mines Holdings Ltd said on Tuesday it had entered a strategic partnership with a subsidiary of India's Tata Steel Ltd , sending the Canadian company's shares soaring 20 percent shortly after the market opened.

As part of the C$30 million ($29.2 million) deal, Labrador Iron Mines will sell a 51 percent stake in its Howse development-stage project to Tata Steel Minerals Canada.

The deal also includes a preliminary agreement to coordinate on logistics, infrastructure development and potential off-take agreements, Labrador Iron Mines said.

The two companies own adjacent operations in the Labrador trough, an iron-rich region that extends along the border between Quebec and the province of Newfoundland and Labrador. They plan to share rail and port infrastructure.

Labrador Iron Mines operates the James iron ore mine near the town of Schefferville in northern Quebec. Tata is developing its DSO and Taconite iron ore projects, also near Schefferville.

Shares of Labrador Iron Mines rose 20 percent to 78 Canadian cents shortly after market open on Tuesday on the Toronto Stock Exchange.

($1 = 1.0268 Canadian dollars) (Reporting by Julie Gordon; Editing by Dale Hudson)