Anglesey Mining plc
15 August 2013 LSE:AYM
* Interim management statement and LIM results for quarter to 30 June 2013
Anglesey's major activity is its 15% share of Toronto-listed Labrador Iron
Mines Holdings Limited (TSX:LIM) which holds twenty direct shipping iron ore
deposits in western Labrador and north-eastern Quebec and is currently mining
the first of these to be developed at the James Mine.
Anglesey also holds 100% of the Parys Mountain zinc-copper-lead deposit in
North Wales, UK with a total JORC compliant indicated resource of 2.1 million
tonnes and an inferred resource of 4.1 million tonnes.
* Labrador
Labrador Iron Mines has published its Financial Statements and Management
Discussion and Analysis report for the three months ending 30th June 2013 both
of which can be found on SEDAR and on LIM's website at www.labradorironmines.ca
. Key points are:
* During the quarter, LIM sold two shipments of iron ore totalling 328,000
dry tonnes and reported revenue of C$17.9 million (free on board Port of
Sept-Îles).
* LIM commenced its third operating season in early April 2013 at the James
Mine, following a waste removal program in March. The Silver Yards
Processing Facility resumed operations in April with initial ore processing
activities commencing from the dry plant.
* Mining, processing and railing operations during the quarter were hampered
by a combination of slower than anticipated contractor mobilization in
March and challenging weather conditions in March and April. Train loading,
railing and shipping were limited to the availability of saleable product
produced, resulting in higher operating costs and lower revenue during the
quarter due to fewer ships sold than planned.
* For the first quarter ended June 30, 2013, LIM reported a net loss of
C$28.5 million.
* At June 30, 2013 current assets were C$67.9 million, including inventories
with a carrying value of C$11.0 million, accounts receivable and prepaid
expenses of C$26.2 million, a total of C$27.3 million in unrestricted cash
and cash equivalents and C$8.6 million in restricted cash. Current
liabilities, consisting of accounts payable and accrued liabilities, the
current portion of deferred revenue, finance lease obligations and
rehabilitation provision, were in aggregate C$67.2 million.
* The Phase 3 expansion of the wet plant was largely completed in June, with
commissioning of the wet high intensity magnetic separator continuing
through July.
* Subsequent to the end of the quarter, LIM's third and fourth shipments of
2013 departed from the Port of Sept-Îles, totalling approximately 361,500
wet metric tonnes of iron ore product at a grade of 62% iron ("Fe").
* With the completion of all construction and commissioning activities at
Silver Yards and the addition of a fourth train set in July, mining and
railing volumes are now achieving operating plan objectives, while product
recoveries in the wet plant are improving.
* LIM is currently targeting a total of approximately 1.7 million tonnes of
iron ore products in 2013 consisting of ten shipments. Planned shipments
for the balance of 2013 will be sinter fines and lump ore at a planned
average grade of about 62% Fe.
LIM's first quarter ended June 30, 2013 was characterized by a disproportionate
amount of waste removal, and lower than planned volumes of mining, railing and
sales, resulting from slower than anticipated contractor mobilization in March
and challenging weather conditions in March and April. As a consequence, train
loading, railing and shipping volumes were limited to the availability of
saleable product produced. LIM incurred significant rail related volume
commitment penalties during the quarter and achieved sales of only two
shipments instead of three shipments as planned. The sale of the third shipment
occurred shortly after the end of the quarter.
For the quarter ended June 30, 2013, LIM's loss of C$28.5 million included a
depletion and depreciation charge of C$5.6 million and rail take-or-pay
transportation penalties of C$6.2 million.
"LIM recognizes its current cost structure is too high and has undertaken a
number of immediate and decisive measures to reduce both capital and operating
costs" commented John Kearney, LIM Chairman and Chief Executive Officer. "The
key to reducing operating costs is to maintain and increase production volumes
of iron ore. It is expected that as production volumes increase during the
remaining months of the operating season, a significant reduction in operating
unit costs will be achieved in the second and third quarters."
With the increase in production and railing volumes, the minimization in
take-or-pay transportation penalties and the implementation of cost savings
initiatives, cash operating costs during the remaining three quarters of the
fiscal year are expected to be substantially lower than in the first quarter.
"With more favourable spot iron ore prices seen in recent weeks, combined with
the operational improvements and cost reductions, we expect to achieve stronger
results for the balance of the 2013 season" added John Kearney.
* Parys Mountain
Operations at Parys Mountain have been limited since the last report and
largely confined to care and maintenance of the facilities. Nevertheless a
geological review of the property based in a large part on the results from
last year's drilling programme has commenced and is expected to lead to a
reappraisal of development targets which will be an input into revisions to the
Scoping Study.
Meanwhile the company remains confident that the market for its key base
metals, particularly zinc, will improve in the medium term as the world comes
out of recession and as China continues to show strong growth despite earlier
uncertainties.
* 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;
Danesh Varma, Finance director +44 (0) 20 7653 9881;
Samantha Harrison: RFC Ambrian +44 (0)20 3440 6800;
Emily Fenton/Jos Simson:
Tavistock Communications +44 (0)20 7920 3155.