Anglesey Mining PLC LIM March 2013 year-end results and operational update


 
TIDMAYM 
 
Anglesey Mining plc 
 
3 July 2013 LSE:AYM 
 
LIM March 2013 year-end results and operational update 
 
Anglesey Mining's 15% held associate Labrador Iron Mines Holdings Limited (TSX: 
LIM) today reports its operating and audited financial results for the fiscal 
year ended March 31, 2013. LIM is also pleased to provide an update on its 2013 
operating season, as the second shipment of iron ore departed the Port of 
Sept-Îles on June 27, 2013. 
 
Recent Operating Highlights 
 
LIM commenced its third season of operations in April 2013 with the re-start of 
full-scale mining activities targeting 1.75 million to 2.0 million tonnes of 
saleable iron ore production in 2013. Recent operating highlights include: 
 
  * The first shipment for 2013 sailed from the Port of Sept-Îles in early June 
    carrying approximately 174,000 wet metric tonnes ("wmt") of iron ore. This 
    was followed by LIM's second shipment carrying approximately 177,500 wmt on 
    June 27, 2013. 
 
  * The Silver Yards Phase 3 upgrade and expansion for the wet plant was 
    commissioned in June and has been operating in conjunction with the dry 
    plant, which has been processing ore since April. 
 
  * Railway operations recommenced in early April. For the 2013 operating 
    season, LIM is using newly-built, rotary dumper compatible iron ore 
    gondolas, comprising longer, 164-car train sets, allowing for improved 
    productivity and potential cost savings. 
 
  * New, independent National Instrument 43-101 ("NI 43-101") year-end resource 
    estimates showed a 33% net increase in LIM's year-end mineral resource to 
    59.5 million tonnes grading 56.7% Fe, including an increase in the combined 
    Houston and Malcolm resource to 40.6 million tonnes grading 57.6% Fe. In 
    addition, a new indicated and inferred resource was also estimated on 
    historic stockpiles, providing supplementary plant feed for Silver Yards in 
    future years. 
 
  * LIM announced its first independent NI 43-101 inferred mineral resource 
    estimate on the Elizabeth Taconite Project of 640 million tonnes grading 
    31.8% Fe. 
 
"We are pleased with the solid start to our third operating season, highlighted 
by two shipments sold in June," commented Rod Cooper, President and Chief 
Operating Officer. "Our operating crews have worked hard in addressing the 
challenging weather conditions experienced in April and May and activities at 
site have progressed well as we head into the important summer months. The ramp 
up of the Silver Yards processing facility and connection to the power grid are 
two positive accomplishments, and with a number of other enhancements made in 
the areas of the mine, process plants and rail, we look forward to meeting our 
production targets for the year." 
 
Addressing important requirements for the 2013 operating season 
 
"In preparation for the 2013 operating season, we have executed many important 
initiatives in securing our working capital requirements, increasing liquidity 
and addressing volatility in the iron ore markets." commented John Kearney, 
Chairman and Chief Executive Officer. "We believe this has allowed us to 
mitigate some of the challenges we experienced in 2012, which overshadowed our 
operational achievements during the year." 
 
  * In May 2013, LIM signed a new, two-year iron ore sales agreement with the 
    Iron Ore Company of Canada ("IOC") for the sale of LIM's iron ore 
    production for calendar years 2013 and 2014, with the price calculation 
    based on the monthly average of the market index. 
 
  * At the same time in May 2013, LIM entered into an off-take financing 
    arrangement with RB Metalloyd Limited ("RBM"), under which RBM advanced a 
    pre-payment of US$35 million to LIM, to be credited against the proceeds of 
    LIM's committed sales of 3,500,000 tonnes of iron ore during 2013 and 2014. 
 
  * LIM has put in place a limited price protection program to address 
    potential iron ore market volatility, purchasing put options on 825,000 
    tonnes of iron ore over the period August to October 2013, exercisable at a 
    CFR China price of US$105 per tonne. 
 
  * In order to mitigate the risk of significant ocean freight cost escalation, 
    LIM has agreed to fixed freight costs to northern China on seven vessels 
    during 2013. 
 
  * In March 2013, LIM established a strategic relationship with Tata Steel 
    Minerals Canada ("TSMC"), a subsidiary of Tata Steel Limited, which 
    includes multi-part cooperation agreements in various aspects of the 
    companies' respective iron ore operations in the Labrador Trough. Subject 
    to completion of formal agreements, TSMC will pay $30.0 million to LIM for 
    the sale of a 51% interest in LIM's Howse deposit, which will be used to 
    fund various expenditures for the 2013 operating season. 
 
John Kearney added, "For 2013, our operational priorities are to minimize 
costs, maximize production and sales and to ensure that sales revenue is 
generated as early as possible. We have implemented cost reduction and cash 
conservation measures across all aspects of our operations." 
 
Financial Results 
 
For the fiscal year ended March 31, 2013, LIM recognized revenue from mining 
operations of $95.7 million (FOB Port of Sept-Îles) on sales of 1.56 million 
dry tonnes of iron ore in ten shipments completed during the year. This revenue 
is recognized on an FOB Port of Sept-Îles basis and is net of deduction of 
ocean freight and IOC's participation. 
 
Revenue for the 2013 fiscal year was negatively impacted by low realized iron 
ore prices (CFR China spot price less value-in-use adjustments and before ocean 
freight and IOC participation), particularly in the period from August to 
October 2012, when the spot price of iron ore suffered a sharp decline of 33%. 
 
For the fiscal year ended March 31, 2013, LIM reported a loss of $129.7 million 
or $1.56 per share, resulting primarily from an operating loss (before 
depletion and depreciation) of $28.9 million, a depletion and depreciation 
charge of $29.7 million and write-downs totalling $61.2 million comprising a 
write-down of mineral property interests of $58.1 million and a $3.1 million 
provision against certain doubtful receivables. 
 
Notice: Conference Call and Webcast held today at 11:00 am Toronto time. 
Dial-in: +1 (647) 427-7450 
 
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. 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. 
 
About Anglesey Mining plc 
 
Anglesey holds 15.3% of Toronto-listed Labrador Iron Mines Holdings Limited 
which 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
Anglesey Mining (LSE:AYM)
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