LIM Announces Equity Financing

Anglesey Mining’s 19.7% owned associate Labrador Iron Mines Holdings Limited (TSX:LIM) announces that it has filed a preliminary short form prospectus in connection with an overnight marketed public offering (the “Offering”) of common shares in LIM ( “Common Shares”). The Offering will be conducted through a syndicate of underwriters led by Canaccord Genuity Corp. (the “Underwriters”). LIM will also grant the Underwriters an over-allotment option to purchase up to that number of additional common shares (the “Over-Allotment Common Shares”) equal to 15% of the Common Shares sold pursuant to the Offering, exercisable at any time up to 30 days after and including the closing of the Offering at a price equal to the offering price of the Common Shares.

The Offering will be priced in the context of the market with final terms of the Offering to be determined at the time of pricing.

LIM intends to use the net proceeds from the Offering to fund mining, processing and inventory costs, including payments to the LIM’s mining contractors, and transportation costs in connection with the resumption of production operations and to supplement working capital and general and administrative costs for the remaining winter season.

For the 2012 operating season LIM met its reduced 2012 production target of 1.7 million wet tonnes of iron ore production and sold a total of 1.56 million dry tonnes of iron ore products. LIM sold two cape-size shipments in October for approximately 322,000 dry tonnes, the sales proceeds of one of which were received in October and one final shipment of lump ore of approximately 103,000 tonnes, the sales proceeds of which remained receivable as at December 31, 2012 and were received in January 2013.

LIM expects to report revenue from iron ore sales of approximately $23 million for the quarter ended December 31, 2012, and approximately $94 million for the nine month period ended December 31, 2012.  As at December 31, 2012, LIM had cash of approximately $10 million and expects to be in a positive working capital position as at that date.

For 2013 and following years, operations will be focused on LIM’s Stage 1 deposits including the James Mine (currently operating) and six smaller satellite deposits and some historical stockpiles located within a 15 km radius of the James Mine and the Silver Yards processing plants. LIM is currently targeting production for the 2013 season at a similar level as in 2012 of between 1.7 million and 2 million wet tonnes of iron ore produced.

In resuming its planned seasonal mining operations in the spring of 2013, for its 2014 fiscal year, LIM will incur regular operating, mining and transportation expenses for the months of April and May, 2013 before receipt of payment for its first sales of iron ore anticipated in June 2013 and will require working capital of approximately $40 million to fund these operating and re-start expenses.

LIM has been actively pursuing working capital financing arrangements for the seasonal start-up of operations in the first quarter of its 2014 fiscal year (April to June 2013).  Such financings may include an operating line of credit or product off-take arrangements or a combination of these alternatives.  However, while a number of institutions have provided term sheets for financings in the range of $20 to $40 million, subject to various conditions, and undertaken due diligence, at the present time there can be no assurance that such financing can be fully completed by the beginning of the 2013 operating season.  Accordingly, LIM is pursuing the Offering to ensure no delay in the orderly seasonal resumption of operations in April 2013.

LIM’s preliminary operating results for the quarter ended December 31, 2012 and for the nine months ended December 31, 2012 are outlined in the table below.

Quarter Ended December 31, 2012 Nine Months Ended December 31, 2012
(all tonnes are dry metric tonnes) Tonnes Grade % Fe Tonnes Grade (% Fe)
Total Ore Mined 198,467 59.9% 1,828,398 61.3%
Direct Rail Ore portion 159,637 60.9% 1,212,870 62.3%
Waste Mined 224,548 3,127,158
Ore Processed and Screened 183,635 59.8% 954,813 58.2%
Lump Ore Produced 18,082 64.6% 98,693 61.2%
Sinter Fines Produced 149,698 61.4% 693,173 61.4%
Total Product Railed 254,136 61.8% 1,492,960 62.3%
Tonnes Product Sold 425,472 62.0% 1,559,620 62.5%
Port Product Inventory 111,009 60.9% 111,009 60.9%
Site Product Inventory 3,551 58.4% 3,551 58.4%
Site Run-of-Mine Ore inventory 446,975 56.2% 446,975 56.2%

The Offering is being made pursuant to a short form prospectus to be filed in each of the provinces of Canada other than Quebec. The Offered Securities will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

This press release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.

For further information, please visit LIM’s website at www.labradorironmines.ca.

About Anglesey Mining plc

Anglesey holds 19.7% of Toronto-listed Labrador Iron Mines Holdings Limited (TSX:LIM) which is producing high grade hematite from its James pit, one of LIM’s twenty 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.

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