Anglesey Mining’s 26% owned associate Labrador Iron Mines Holdings Limited (TSX: LIM) provides an operations and status report for the first six weeks of the 2012 production season as follows:
After the successful re-start of full-scale mining operations at the James Mine on April 2, we are pleased to announce that LIM’s first shipment and sale of iron ore has been recorded in 2012.
- The James Mine commenced its first full season of production on April 2 and is on track to mine approximately 3.0 million tonnes of iron ore, with a saleable production target of 2.0 million tonnes for 2012.
- The first shipment of iron ore containing 175,738 wet tonnes of direct rail ore (DRO) at a grade of 63.65% iron (Fe) departed the Port of Sept-Îles on May 19. This is five months earlier than the first shipment in 2011. Going forward, at least two shipments are anticipated each month during the operating year, with the next shipment scheduled in early June.
- The Silver Yards Processing Facility re-started for the season on May 18 and the Phase 3 plant expansion, designed to increase production capacity to approximately 2.0 million tonnes per year, is slated for completion in the summer.
- By May 15, four train sets at 120 cars each (~10,000 tonnes per train) were in service, approximately one month ahead of the planned schedule. Four train sets are expected to be in service for the balance of the 2012 season.
- Construction at the Houston Project commenced in May. Following the receipt of initial permits, a contract has been awarded for tree clearing work to be completed along the access road alignment. Development of the Houston Project is proceeding according to plan, with an experienced team of engineers and construction managers in place.
- As LIM enters an exciting phase of growth, operations and expansion, a number of key appointments to strengthen the executive and mine management teams have been made.
“This has been an extremely positive start to 2012, as we have executed on key milestones that will ensure a successful operating season,” stated Mr. John Kearney, Chairman and Chief Executive Officer. “With LIM’s first shipment and sale of iron ore, we are off to a good start to meet our production target of two million tonnes this year.”
Mr. Rod Cooper, President and Chief Operating Officer, commented: “On the operations front, mining at James is progressing well and is now complemented with the start-up of the Silver Yards plant. As railway operations are critical to our success, we are very encouraged by the improvements evident in railway efficiency. We are also encouraged and excited with the development at Houston, as construction activities are now underway.
“As we forge ahead with our 2012 season, the recent additions to both our executive and operational teams will ensure we have the organizational capacity to remain focused on delivering our goals and expanding our operations as we move forward with the growth and success of our company.”
Ramping up production at James
The James Mine commenced its first full season of production on April 2, 2012 and mining operations will continue until the end of November. Mining activity focused on waste removal from the pit in order to establish the required ore release for later in the quarter. At the end of April, the mine was operating at a rate of 17,000 tonnes per day (tpd) and will continue to ramp up to a planned mining rate of approximately 28,000 tpd.
LIM’s First Shipment and Sale of Iron Ore in 2012
The first shipment carrying LIM iron ore departed the Port of Sept-Îles on May 19, bound for China. This is significantly earlier than the 2011 season, when the first shipment was recorded in the month of October. The shipment contained 175,738 wet tonnes of DRO at a grade of 63.65% Fe. This mixed-size cargo, with an estimated moisture content of 6.6%, was sold to the Iron Ore Company of Canada (IOC) based on a price of US$126.00 per dry metric tonne, CFR China (before ocean freight and IOC allocation). LIM expects the proceeds from the sale of this shipment to be received in mid-June. Moving forward, at least two shipments of iron ore are anticipated each month during the operating year, with the next shipment scheduled in early June.
Iron ore sales are forecasted at 2.0 million tonnes in 2012, including lump iron ore, sinter fines and ultra fines products. Operating costs for products delivered to the Port of Sept-Îles are expected to be in the range of $60 to $65 per dry metric tonne, including mining, processing, general and administrative costs, railway costs and train unloading.
Railway operations started with two train sets in April and successfully moved stockpiles at Silver Yards. Early movement of these stockpiles has allowed us to develop our “just-in-time” rail yard stockpile system, and will advance our sales by one month. A further stockpile of approximately 230,000 tonnes of DRO at a grade of about 63% Fe had been built up by May 19 and remains at the Port after the first shipment.
Starting up the Silver Yards Processing Plant
The Silver Yards processing plant re-started on May 17, 2012. Initial throughput is targeted at 8,000 tpd. The Phase 3 expansion program, which includes the installation of a second washing and screening plant and a new magnetic separator to enhance the recovery of fines material, continues to be on schedule and is expected to be completed in the summer. This expansion is expected to increase plant throughput to 12,000 tonnes per day, or an annual throughput of 2.0 million tonnes per year, and is also expected to improve weight recoveries to approximately 75% – 80%.
Expanding Rail Capacity
We have expanded our available railway capacity, from two operating trains in April to four operating trains by May 15, approximately one month ahead of the original schedule. The four trains will ensure the timely transportation of LIM’s iron ore product to the Port of Sept-Îles and moves LIM closer to fulfilling its “a train a day” objective in 2012. During the month of April, LIM railed 108,000 wet tonnes of run-of-mine stockpile to the Port of Sept-Îles.
Early Start at the Houston Project – Receipt of Initial Construction Permits
The Houston Project will represent LIM’s flagship operation in future years. The Houston Project consists of a series of adjacent open pit deposits with a NI 43-101 compliant resource containing approximately 22 million tonnes at a grade of 57.3% (see technical report dated March 25, 2011 filed on SEDAR). LIM received the environmental approval and project release for the Houston Project (Stage 1 and 2) from the Government of Newfoundland and Labrador in March 2012.
We are now focused on fast-tracking the development of the Houston Project and with receipt of the initial permits, a contract has been awarded for the tree clearing work to be completed along the access road alignment. Subject to receipt of the remaining permits, commencement of full construction activities at Houston is planned for the summer of 2012. LIM expects initial production of Houston ore, including in-pit dry crushing and screening, will commence in the second half of 2013.
LIM is committed to expanding its infrastructure to accommodate the rapid development at our operations. Currently, electric power at our Silver Yards plant and camp accommodation is being provided by diesel generators. Plans are currently underway to connect to the existing hydroelectric grid by the end of the third quarter of 2012, resulting in fuel savings for the remainder of the year and subsequent operating seasons.
As a result of expanding activities at site, the camp accommodation is also undergoing a doubling of capacity, from 70 to 140 persons. Completion of the expansion is expected by the end of the summer.
Following on the success of previous exploration programs, a 2012 budget of approximately CAD$8 million has been set to support LIM’s aggressive drilling efforts. An exploration drill contractor has been selected to carry out this work in 2012. Drill programs at Houston as well as a number of other deposits will focus on generating further technical information required for more detailed mine planning. In addition to this drilling, a bulk sampling program of some historic stockpiles will be initiated with a view to providing supplemental plant feed.
In a new initiative to the main focus on direct shipping (DSO) iron ore, LIM plans an initial core drill program on previously identified, lower grade taconite iron mineralization, which will be supported by geophysical programs. In addition, metallurgical test work aimed at evaluating historical manganese resources will be carried out with a view to ascertaining compatibility with the Silver Yards processing plant flow sheet.
About Labrador Iron Mines Holdings Limited (LIM)
LIM is engaged in the production and development of its 100% owned Schefferville Area direct shipping iron ore (DSO) properties in the Labrador Trough of western Labrador and north-eastern Quebec. The properties are part of the historic Schefferville area iron ore district where mining of adjacent deposits was previously carried out by the Iron Ore Company of Canada from 1954 to 1982.
LIM commenced production from the James Mine in June 2011, following the successful construction and commissioning of the mine and Silver Yards processing plant earlier in the year, and recorded its first sales of iron ore in the fall of 2011.
LIM contemplates mining in stages. The first phase of Stage 1 comprises the James Mine and the Silver Yard processing plant which is connected by a rail spur to the main Schefferville to Sept-Iles railway. Through a phased expansion program, LIM plans to grow its iron ore production through the subsequent development of adjacent deposits.
Stage 2 comprises the development of the Houston deposits, which has now completed environmental assessment and is moving to the permitting, development and construction phase.
About Anglesey Mining plc
Anglesey holds 26% of Toronto-listed Labrador Iron Mines Holdings Limited (TSX: LIM) which is now producing iron ore from its James deposit, one of LIM’s twenty direct shipping iron ore deposits in western Labrador and north-eastern Quebec. Development of other deposits is underway and production of the high grade hematite iron ore is targeted to grow from 2Mt in 2012 to 5Mt in 2015.
Anglesey is also carrying out development and exploration work at its 100% owned Parys Mountain zinc-copper-lead deposit in North Wales, UK where there is estimated to be a total historical resource in excess of 7 million tonnes at over 9% combined copper, lead and zinc.
For further information, please contact:
Bill Hooley, Chief Executive +44 (0)1492 541981;
Ian Cuthbertson, Finance Director +44 (0)1248 361333;
Samantha Harrison / Klara Kaczmarek,
Ambrian Partners Limited +44 (0)2076 344700;
Emily Fenton / Jos Simson,
Tavistock Communications +44 (0)20 7920 3155 / +44 (0) 7788 554035