5 March 2010 LSE:AYM
Anglesey Mining plc is pleased to report that its 50% owned associate company Labrador Iron Mines Holdings Limited (TSX:LIM) announced today that it has entered into an agreement with Canaccord Financial Ltd. and a syndicate of underwriters, collectively, the "Underwriters", which has agreed to purchase, on a bought deal basis, 3,640,000 common shares from LIM's treasury (the "Treasury Common Shares") and 760,000 "tax flow-through" common shares from LIM's treasury (the "FT Shares" and together with the Treasury Common Shares, the "Underwritten Shares") at a price of C$5.55 per Treasury Common Share and C$6.65 per FT Share, for aggregate gross proceeds of C$25,256,000 (collectively the "Underwritten Offering").
In addition, Anglesey Mining plc has granted the Underwriters an option to purchase from Anglesey up to 546,000 previously issued common shares of LIM (the "Secondary Common Shares" and together with the Underwritten Shares, the "Offered Securities"), at a price of C$5.55 per LIM common share, for the purpose of covering the Underwriters' over-allocation position, for gross proceeds of up to C$3,030,300 in cash, (approximately £2 million). This Over-Allotment Option represents up to 15% of the amount to be raised by LIM pursuant to the sale of LIM's Treasury Common Shares, on the same terms and conditions.
The Offering is being made by LIM pursuant to a Short Form Prospectus to be filed in the Canadian provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador. 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.
The LIM Underwritten Offering is expected to close on or about 25 March 2010. The Over-Allotment Option is exercisable by the Underwriters at any time, in whole or in part, up to 30 days after the date of the closing of LIM's Underwritten Offering.
Anglesey currently holds 18,600,000 common shares of LIM and the Over-Allotment Option represents approximately 2.9% of Anglesey's shareholding in LIM. If the Over-Allotment Option is exercised by the Underwriters the proceeds from the sale of the Secondary Common Shares, of up to C$3,030,300 (before commission and expenses), will be used by Anglesey for general corporate costs and working capital purposes.
The net proceeds from the Underwritten Offering will be used by LIM for exploration and development of LIM's mineral projects, and for general corporate and working capital purposes. LIM has 37,148,451 common shares outstanding, prior to the Underwritten Offering.
LIM Schefferville area project involves the exploration and development of direct shipping iron ore deposits in Western Labrador and north eastern Quebec near Schefferville. LIM's properties are part of the historic Schefferville area iron ore district where mining of adjacent deposits was previously carried out by the Iron OreCompany of Canada from 1954 to 1982. LIM plans to mine its deposits in varying stages, the first stage comprising the James and Redmond deposits, located in Labrador, in close proximity to existing infrastructure. Subject to timely receipt of all permits and licences, LIM plans to commence iron ore production in the summer of 2010.
Should the proposed Over-Allotment Option proceed in full, Anglesey will receive C$3,030,300 (approximately £2 million before commission and expenses) in cash in respect of the disposal of part of its shareholding in LIM. After the LIM financing this Over-Allotment Option will reduce the Company's holding in LIM by 1.3%.
LIM is accounted for in the group financial statements as an associated company and this treatment is not expected to change.
Anglesey Mining plc is a UK based company listed on the London Stock Exchange which currently holds 18,600,000 shares in Labrador Iron Mines Holdings Limited. The company also holds the Parys Mountain base metals project in Anglesey, Wales, UK, with a historical mineral resource of 7.7 million tonnes at 9.3% combined copper, lead and zinc.
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.
Bill Hooley, Chief Executive +(44) 1492 541981
Ian Cuthbertson, Finance Director +(44) 1248 361333