Anglesey Mining plc
27 November 2008 LSE:AYM
Interim Report 2008
Chairman�s statement
The year to date has been dominated by the global economic slowdown, particularly its effects on Chinese production and demand and the ensuing downturn in worldwide commodity prices. This downturn has affected the share price of most mineral companies. Fortunately with Labrador Iron funded, the group is in a position to weather the current economic difficulties.
Labrador Iron Ore
Development at the group�s 50% owned Labrador Iron project in Canada advanced to a high level. During the summer over 4,500 metres of reverse-circulation drilling were completed together with a further 1,000 metres of hydro-geological drilling. Work is now in progress on compiling updated resource estimates and a detailed engineering and design study.
Some 6,500 tonnes of bulk sample were extracted from the first four deposits. This material has been crushed and screened and is being shipped to the port of Sept-�les for onward delivery to potential end-users. Detailed engineering and design work for the infrastructure and beneficiation systems has progressed well. Arrangements for the rail transport and port facilities have also advanced and the first ten ore transport cars have arrived on site.
Labrador Iron Mines had initiated environmental baseline studies in the region at the start of exploration in 2005/2006. Since that time, seasonal environmental studies, including work with elders of the various aboriginal nearby communities, has been conducted to document the existing environment and to include the collection of traditional knowledge in the environmental assessment. In 2008 these programs were ramped up to meet the scope of the proposed development. In April 2008, a Project Registration Application was submitted for the first phase of development of the project to the Department of Environment and Conservation in the Province of Newfoundland and Labrador and to the Canadian Environmental Assessment Agency (CEAA). The Project Registration Documentation addresses production from the first phase of the project, being the James North, James South and Redmond properties. These properties have been the subject of prior activity carried out by the Iron Ore Company of Canada and are already partially developed.
On August 13, 2008 the Minister of Environment and Conservation requested an Environmental Impact Statement (EIS) as part of the application process. On October 29, 2008 the Minister published the draft guidelines for the preparation of the EIS for public comment. The Minister is expected to publish the final guidelines, which will include public consultation meetings, in early December. The work necessary to complete this EIS is now being progressed and it is expected that the EIS will be submitted prior to the calendar year end. On submission the Minister will have a period of 70 days to review the EIS, following which it should be submitted to the Cabinet for project approval. Upon release of project approval, applications for the necessary operating permits will be made. Assuming the operating permits are issued in the first or second quarter of the year, it is planned to commence mining operations during the summer of 2009. If the permits are not issued in time to enable summer operations, the start of initial production may be delayed to 2010.
Discussions continue with a number of potential purchasers of iron ore product. There has been a major decline in spot iron ore prices in recent months but the company expects to sell most of its product based on the annual benchmark prices agreed between the major suppliers and steel mills. It is likely that these benchmark prices will weaken somewhat from the highs of 2008. At the end of September, Labrador Iron held $C43.5 million (�23.0 million) in cash, which is considered sufficient to take the project through to first production.
Parys Mountain
During the period extensive discussions took place with the Australian company Western Metals Limited regarding a major investment in the Parys Mountain project. As previously announced, these discussions were terminated in mid-October with no agreement being reached.
Prices for base metals and in particular zinc and lead have fallen significantly during the last three months. Nevertheless the board believes that the Parys Mountain project, with its asset base still intact and its planning permissions still valid, is well placed to take advantage of the upturn that is likely to follow these price falls. In the meantime development work on Parys Mountain will be maintained at low levels until there are signs of a recovery.
Financial
The loss for the six month period was �444,330 (2007 - �196,435) of which share based remuneration amounted to �206,156 (2007- nil). Development expenses capitalised amounted to �76,824 in respect of Parys Mountain (2007 �84,829) and nil in respect of Labrador (2007 - �168,007); this year the Labrador development is through an equity accounted associated company in which the group has a 50% interest. The group has no revenues from the operation of its properties.
Outlook
In common with all other resource companies we are in a very uncertain economic climate. However Parys Mountain can be maintained on a minimum expenditure basis with no further significant demands on capital until markets improve. Juno Limited, the group�s major shareholder, has indicated that it intends to continue its financial support, including making available further cash advances. Labrador Iron continues to benefit from its strong cash position and its ability to progress to development. The directors believe that the group is in a relatively healthy position to ride out the current economic difficulties.
John F Kearney
Chairman
27 November 2008
For financial statements please visit www.angleseymining.co.uk
For further information:
Bill Hooley, Chief Executive |
+(44) 1492 541981 |
Ian Cuthbertson, Finance Director |
+(44) 1248 361333 |
mail@angleseymining.co.uk www.angleseymining.co.uk
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Anglesey Mining plc
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CODE : AYM.L |
ISIN : GB0000320472 |
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Anglesey Mining is a iron exploration company based in United kingdom. Anglesey Mining holds various exploration projects in Canada. Its main asset in development is SCHEFFERVILLE (HOUSTON) in Canada. Anglesey Mining is listed in United Kingdom. Its market capitalisation is GBX 284.2 millions as of today (US$ 333.0 millions, € 306.6 millions). Its stock quote reached its lowest recent point on November 22, 2002 at GBX 0.30, and its highest recent level on March 11, 2011 at GBX 93.87. Anglesey Mining has 177 608 051 shares outstanding. |