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LETTER OF TRANSMITTAL

June, 30, 2010

Toronto

Please read the Instructions beginning on page 4 of this Letter of Transmittal carefully
before completing this Letter of Transmittal.

TO: LABRADOR IRON ORE ROYALTY INCOME FUND
AND TO: LABRADOR IRON ORE ROYALTY CORPORATION
AND TO: COMPUTERSHARE INVESTOR SERVICES INC., AS DEPOSITARY

This letter of transmittal (“Letter of Transmittal”) is for use by registered holders (“Unitholders”) of trust units (“Fund Units”) of Labrador Iron Ore Royalty Income Fund
(the “Fund”) in connection with the arrangement (the “Arrangement”) involving, among others, the Fund, Labrador Mining Company Limited and Labrador Iron Ore Royalty Corporation, as described in the management information circular of the Fund dated April 15, 2010
(the “Information Circular”). Pursuant to the Arrangement, Unitholders will receive, for each Fund Unit held, a stapled unit (“Stapled Unit”), which will be comprised of one LIORC Share and one Subordinated Note Receipt.

Capitalized terms used but not defined in this Letter of Transmittal shall have the meanings given to them in the Information Circular.

Unitholders will not receive certificates for Stapled Units until they submit the certificates for their Fund Units to the Depositary along with a duly completed Letter of Transmittal.

Unitholders whose Fund Units are registered in the name of a broker, dealer, bank, trust company or other nominee should contact their nominee for information about how the exchange of their Fund Units will be effected.


Please direct all inquiries concerning the Arrangement to:

LABRADOR IRON ORE ROYALTY INCOME FUND
40 King Street West
Scotia Plaza, 26th Floor
Box 4085, Station “A”
Toronto, ON
M5W 2X6
Phone: (416) 863-7133

Please direct all Letter of Transmittal inquiries to:

COMPUTERSHARE INVESTOR SERVICES INC.
By Mail
P.O. Box 7021
31 Adelaide St E
Toronto, ON
M5C 3H2
Attention: Corporate Actions
By Registered Mail, Hand or by Courier
100 University Avenue
9th Floor
Toronto, ON
M5J 2Y 1
Attention: Corporate Actions
Toll Free (North America): 1-800-564-6253
Overseas: 1-514-982-7555
E-Mail: corporateactions@computershare.com