I think this license is the same one that Cubicle-7 has for their One Ring RPG.
If so, this game can use any place, item, character, or creature from..
Hobbit & Appendixes
LOTR & Appendixes
The upcoming One Ring RPG is even set during the same time-frame.
I'm 100% sure you will see the Balrog etc.
But anything else you want from The Silmarillion, Unfinished Tales, Children of Hurin, or the 12 volumes of History of Middle Earth are off-limits!
If that's so, then I can see why they'd want to exhaust those before moving onto anything else.
But surely the rights for the Silmarillion are going to be cheaper than those for LOTR? and well worth it if the game proves to be popular in a year or two.
Besides, who doesn't want to have Feanor as your Hero? 4 or 5 for Attack, Defence and Willpower, but with a card text of "every time you use Feanor, deal one point of damage to one of your other heroes"... or something like that, not got it figured out yet, just convinced that a deck full of Noldur would be cool.