Update on project construction and development
Anglesey Mining plc’s 41% owned associate Labrador Iron Mines (TSX: LIM) (`LIM’ or `the Company’) is pleased to report that it has filed its unaudited financial statements and MD&A for the second quarter and six months ended September 30, 2010. The documents are available under the Company’s profile at www.sedar.com and on its website at www.labradorironmines.ca.
During the quarter and six months ended September 30, 2010 LIM invested $2,014,537 and $3,294,549, respectively, in its mineral properties, and also invested $3,401,634 and $10,204,731, respectively, in property, plant and equipment. The substantial increase in investment in property, plant and equipment was due to the significant investment in processing equipment and rail spur line and to procurement and commencement of construction of the processing plant for LIM’s direct shipping iron ore project in western Labrador.
For the quarter ended September 30, 2010 LIM reported a net loss of $897,421, or $0.02 per share, compared to a net loss of $530,273, or $0.02 per share, during the same period in the prior year. For the six months ended September 30, 2010 LIM reported a loss of $1,512,110, or $0.03 per share, compared to a loss of $816,997, or $0.02 per share, for the same period in the prior year.
At September 30, 2010, LIM had cash and cash equivalents in excess of $35.2 million. Working capital was $30.6 million, with no borrowings or bank debt.
Construction of the beneficiation plant and associated facilities has progressed well since early September. All the foundations required for erection of the plant have been poured and are complete. All the piers for the conveyors have been installed, including those leading to the radial stackers and to the secondary crusher, and a significant number of the conveyor structures are in place. The steel structure for the secondary screens tower has been completed and the chutes, stairs and flooring for the transfer tower are all installed.
All the major items of processing equipment have been installed, including the primary and secondary screens, tumblers and chutes. The dome roof structure is being assembled at site and is expected to be installed by the end of November. This will enable installation of the piping, electrical and other work to be carried out during periods of poor winter weather.
The accommodation camp at Bean Lake has also progressed rapidly. The installation of the kitchen-recreation complex is complete and a number of the accommodation units are in place. It is expected that the camp will be all complete before the end of November and available for use over the winter.
Mine site preparation at the James Mine has commenced with the development of the mine haul road and clearing and grubbing of the entire mining site almost complete, and exposing the ore body. Development of the first production bench in the Mine will follow shortly. Some small ore stock piles have been moved to Silver Yards and, together with the first ore mined from the bench development, will be stockpiled ahead of the primary crusher ready for feed to the processing plant at the commencement of production.
As a result of recent progress, LIM believes it is on track to substantially complete construction of the processing plant and accommodation camp by the end of calendar 2010 and to commence production activities in April 2011. The Company is currently targeting production of about 2 million tonnes of iron ore in calendar 2011, which assumes completion of construction, plant commissioning and a satisfactory start up of mining operations in the second quarter of calendar 2011.
The 2010 exploration program has been completed with 4,500 metres of drilling and 1,400 metres of trenching having been achieved at the Denault, Ruth 8, and Houston properties. Drilling at Houston has indicated some extensions to the resource and these, together with Denault results, will be incorporated into revised resource estimates when assay results are received.
Political / First Nations Developments
In September 2010 LIM entered into an Impact Benefits Agreement (“IBA”) with the Naskapi Nation of Kawawachikamach (the “Naskapi Nation”) with respect to the development and operation of the Schefferville Project in Labrador. Discussions continue with the Innu Matimekush-Lac John and with the Innu Takuaikan Uashat Mak Mani-Utenam towards concluding Impact Benefits Agreements.
Information of a scientific or technical nature contained in this release has been prepared by or under the supervision of Terence McKillen, P.Geo., Executive Vice President of the Corporation and a Qualified Person within the meaning of National Instrument 43-101 of the Canadian Securities Administrators.