Labrador Iron Mines Holdings Ltd. says it has suspended all operations at its mines for the year, due to the low price of iron ore and a refocus by the company to cut costs.
The company said 2014 will be a "development year" as it concentrates its efforts on developing its Houston Mine, located near Schefferville in northern Quebec. The project is slated to begin production in April 2015, pending the completion of financing.
Labrador Iron said it is also looking to lower costs by renegotiating with major contractors and suppliers, and has already put in place savings initiatives in various areas including mining equipment rates, rail car leasing rates and corporate and administration costs.
It said it has enough cash to continue operations over the next year, but is looking to obtain financing if the price of iron ore continues to decline.
"However, there are no assurances that LIM will be successful in obtaining any required financing, or in obtaining financing on a timely basis or on reasonable or acceptable terms," it warned in a statement.
"If LIM is unable to obtain adequate additional financing on a timely basis, the company would be required to curtail all operations and development activities."
John Kearney, the company's chairman and chief executive, said the company was able to reach its sales target of approximately 1.7 million wet metric tonnes of iron ore for 2013, but this was done "at the expense of product quality," affecting the grade and consistency of the ore.
For the fourth quarter ended March 31, it said it had a net loss of $20.5 million, or 15 cents per share, compared with a net loss of $71.3 million, or 65 cents per share, in the same period a year earlier.
For the financial year ended March 31, the company reported a net loss of $105.2 million or 83 cents per share versus a net loss of $129.7 million or $1.56 per share a year ago.