Anglesey Mining PLC LIM signs new sales and off-take agreements


 
TIDMAYM 
 
Anglesey Mining plc 
 
14 May 2013 LSE:AYM 
 
LIM signs new sales and off-take agreements 
 
  * Two year iron ore sales agreement with 
    Iron Ore Company of Canada for 2013 and 2014 
 
  * US$35 million off-take financing with RB Metalloyd 
 
Anglesey Mining's associate Labrador Iron Mines Holdings Limited (TSX: LIM) is 
pleased to report that it has entered into a new iron ore sales agreement with 
the Iron Ore Company of Canada ("IOC") for the sale of all of LIM's iron ore 
production for the next two calendar years 2013 and 2014. 
 
At the same time, LIM has announced that it has entered into an off-take 
financing agreement with RB Metalloyd Limited ("RBM"), a leading international 
commodity trading house, under which LIM will receive an advance payment of 
US$35 million to be credited against future sales of a minimum of 3.5 million 
tonnes of iron ore during 2013 and 2014. 
 
LIM commenced its third year of direct shipping iron ore production from its 
Schefferville area iron ore mines in Western Labrador in April 2013 and is 
targeting production of 1.75 to 2.0 million tonnes of sinter fines and lump in 
2013. The first Capesize shipment of 2013 is expected to be loaded around the 
end of May. 
 
Two year iron ore sales agreement with IOC 
 
Over the past two years, LIM has sold 13 Capesize shipments of iron ore to IOC, 
for a total of approximately 2 million tonnes, all of which was resold in 
China, with the price calculated based on the daily China spot price, subject 
to varying selling discounts, and where the sale of LIM's iron ore experienced 
unpredictable variations based on prevailing market conditions. 
 
Under LIM's new sales agreement, IOC will pay for the iron ore progressively, 
as the ore is resold, with the price calculation based on the monthly average 
of the market index, which should decrease LIM's exposure to market volatility 
experienced in the past two years.  IOC payments will be later reconciled based 
on IOC's net actual aggregate resale price, adjusted for any product quality 
specification premiums or penalties, after ocean freight and IOC's price 
participation. 
 
"We are very pleased to be able to continue our working relationship with IOC 
as we head into our third year of production from our Schefferville area iron 
ore mines" said John Kearney, LIM's Chairman and Chief Executive Officer. "In 
addition, extending the contract for the next two years and fixing the price to 
be calculated based on the monthly average of the market index are two 
important improvements over previous years." 
 
US$35 million off-take financing 
 
Under the terms of the financing agreement with RB Metalloyd, RBM has advanced 
a pre-payment of US$35 million to LIM, which will repaid over a period of two 
years, credited against the proceeds of LIM's sales of iron ore shipments 
between July 2013 and December 2014. 
 
RBM has entered into an iron ore off-take agreement with IOC under which RBM 
has agreed to buy the LIM iron ore from IOC on an FOB Sept-Îles basis. 
 
"This advance payment financing of $35 million from RBM provides LIM with 
important working capital and increased liquidity and will enable us to ramp up 
our 2013 production of iron ore and complete our planned capital investment and 
improvements on our Silver Yards processing plants", added John Kearney. 
 
"We look forward to working with RB Metalloyd, who bring LIM experience and 
expertise in the marketing and sale of iron ore as well as extensive knowledge 
of the iron ore and steel markets worldwide." 
 
Iron Ore Company of Canada (IOC) 
 
IOC is Canada's largest iron ore producer from its mines located in Western 
Labrador and is a leading global supplier of iron ore pellets and concentrates. 
IOC owns 100% of the Quebec North Shore and Labrador ("QNS&L") railway and, at 
the port of Sept-Îles, owns established storage and ore handling facilities, 
including its ship dock capable of taking ocean going vessels up to 240,000 
(dwt) tonnes. 
 
In 2011, LIM entered into a life of mine, rail transportation contract with QNS 
&L for the rail transportation of LIM's products on the QNS&L railway. This 
contract provides for a confidential tariff, with capacity and volume 
commitments on the part of each party. 
 
RB Metalloyd (RBM) 
 
RBM is a leading international commodity trading house with specific expertise 
within the steel making raw materials sectors. RBM is a subsidiary of RB 
Resources, an investment company for all natural resources investments held by 
the Reuben Brothers Group, one of the world's largest privately held investment 
companies. 
 
About Labrador Iron Mines Holdings Limited (LIM) 
 
Labrador Iron Mines (LIM) is Canada's newest iron ore producer with a portfolio 
of direct shipping (DSO) iron ore operations and projects located in the 
prolific Labrador Trough. Initial production commenced at the James Mine in 
June 2011. LIM has commenced its third year of operations and is targeting 1.75 
to 2.0 million tonnes of saleable iron ore production in 2013. 
 
For further information, please visit LIM's website at www.labradorironmines.ca 
 
About Anglesey Mining plc 
 
Anglesey currently holds 19,289,100 shares in LIM which comprise 15.3% of LIM's 
outstanding share capital. Toronto-listed Labrador Iron Mines Holdings Limited 
is producing high grade hematite from its James pit, one of LIM's direct 
shipping iron ore deposits in western Labrador and north-eastern Quebec. 
 
Anglesey is also carrying out exploration and development work at its 100% 
owned Parys Mountain zinc-copper-lead deposit in North Wales, UK where a JORC 
Code-compliant resource of 2.1mt at 6.9% combined base metals in the indicated 
category and 4.1mt at 5.0% combined in the inferred category was published in 
November 2012. 
 
For further information, please contact: 
 
Bill Hooley, Chief Executive +44 (0)1492 541981; 
 
Ian Cuthbertson, Finance Director +44 (0)1248 361333; 
 
Samantha Harrison: RFC Ambrian +44 (0)20 3440 6800; 
 
Emily Fenton / Jos Simson: Tavistock Communications +44 (0)20 7920 3155 
 
 
 
END
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