Labrador Iron Ore Royalty Income Fund - Press release

August 31, 2006

TORONTO, Aug. 31 /CNW/ - Labrador Iron Ore Royalty Income Fund announced
that Iron Ore Company of Canada (IOC) has declared a dividend payable on
October 2, 2006. The Fund will receive US $7.6 Million or about Cdn
$8.4 million or $0.26 per unit.
The Fund also announced that agreement has been reached with IOC to
include the previously excluded Wabush 3 property in the Sublease Agreement
between Labrador Mining Company Limited, a subsidiary of the Fund, and IOC in
consideration of a 7% royalty on sales of iron ore products derived from the
property. Parts of the Knight deposit previously held exclusively by IOC are
also to be included in the Sublease Agreement and subject to the 7% royalty.
Arrangements under the Sublease Agreement have been simplified with Labrador
Mining granting IOC rights to mine 100% of the ore for the 7% royalty. IOC is
proceeding with a drilling program on the Wabush 3 deposit to evaluate it for
inclusion in IOC's ore reserves.
This is an important step in IOC's planning to increase production. An
increase in production and sales of iron ore products from properties covered
by the Sublease Agreement would increase the 7% royalty receivable by the

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