Annual financial report 2014

Anglesey Mining plc

A UK mining company listed on the London Stock Exchange

  • In May 2014 Anglesey entered into agreements giving it the right to acquire a controlling interest in the Grangesberg Iron project in Sweden.
  • Anglesey is carrying out exploration, evaluation and pre-feasibility work at its 100% owned Parys Mountain underground zinc-copper-lead-silver-gold deposit in North Wales, UK.
  • Anglesey holds 15% of Toronto-listed Labrador Iron Mines Holdings Limited (TSX:LIM) which has direct shipping iron ore deposits in western Labrador and north-eastern Quebec.

Chairman’s statement

In what has been a quiet year in the resources sector the company maintained steady progress on a number of fronts whilst awaiting a general turnaround in the underlying markets. Parys Mountain has seen limited activity during the year while operations at Labrador Iron have been disappointing and continued to suffer from low product prices.

After the year end we began participation in the Grangesberg Iron operation in Sweden, which has been a major producer in the past and over the coming year we plan to fully evaluate this opportunity and if justified increase our interest to a majority position. We believe that Grangesberg should become a very exciting project for the company in the future.

Whilst metal prices remained depressed during the financial year there are now very positive signs of a marked upturn. The price of zinc is currently over US$1.00 per pound, a figure last seen in 2011 and copper after some weakness is now back trading at the US$3.25 per pound level.  A continuation of this improvement will allow us to take a far more positive view on the development of Parys Mountain than we have been able to do for some years. Iron ore after a very weak second quarter in 2014 is now slowly recovering and expectations are for continuing improvement. This bodes well both for Labrador and for Grangesberg.

We will continue to monitor these improvements in metal prices and we look forward to an ensuing improvement in the financing and equities markets that would then enable us to bring our two projects forward and to provide much needed support for Labrador Iron.

Parys Mountain

Activity on site has been quiet during the year but Micon International Limited has been engaged to review the mineral potential of the entire Parys Mountain property in North Wales. This review will cover both those resources on which Micon has previously provided JORC compliant indicated and inferred resource estimates as well as studying a number of other zones within the property that were not included in earlier estimates.

The price for zinc metal is now improving and is getting closer to a level that will support the development of a production operation at Parys Mountain, and at the same time demand for concentrates in European markets appears to be growing.

Grangesberg

In May 2014 Anglesey completed the contractual arrangements to secure management control, including the majority of board seats, over the Grangesberg iron ore mine in Sweden. This mine was a significant producer of iron ore until 1989 and current planning indicates a return to production at around 2.0 to 2.5 mtpa later this decade. This could be a very important investment for the company, sourcing iron ore in the European market commencing when the current world-wide expansion of production begins to abate.

A number of technical and commercial activities are in the final planning stages and these will commence imminently. These activities are part of a longer term plan to assess the optimum development and financing strategy for the mine. The company expects to report further progress during the coming months.

Labrador

Production activities in Labrador during the summer 2013 operating season suffered from deteriorating grade and feed product quality.  This caused operational difficulties in the processing plant and resulted in lower grade and quality product being sold than anticipated and this followed through to significantly lower revenues than expected.  Labrador Iron has decided to suspend production activities for 2014 while it seeks to raise additional finance to develop its flagship Houston deposit.  Providing it is successful in this fundraising then it is expected that production will re-commence in the spring of next year.  At that time it should be on a substantially firmer commercial footing and better able to weather the vagaries of geology and the markets.

Outlook

There is certainly more confidence in the air this year than last and while the capital markets for junior miners still remain quite depressed there is some expectation that they will improve in the near term as the benefits of increases in metal prices flows through. Given this expectation we look forward to our projects moving forward positively during the current year.

John F. Kearney

Chairman

30 July 2014

For a full text pdf of the annual report please click here.

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