10 April 08
Anglesey Mining plc (“Anglesey” or “the Company”) is pleased to announce that it has agreed and signed a Term Sheet with ASX-listed Western Metals Limited (“WMT”) of Perth, Western Australia under which it is expected that both parties will enter into a Formal Agreement for the sale to WMT of the Company’s Parys Mountain poly-metallic base metal project in North Wales.
The total consideration for the sale would be AUD (Australian dollars) 29.136 million. At today’s exchange rate this is equivalent to approximately £13.75 million.
WMT has paid Anglesey a non-refundable deposit of AUD270,000 to secure an exclusive right, for a period of up to 120 days, to carry out the due diligence review of the property. During this period Anglesey and WMT will complete a Formal Agreement based on the Term Sheet for the sale of the project subject to satisfactory completion of due diligence by WMT, approvals by the shareholders of both parties if so required and receipt by Anglesey of the Initial Payment.
Upon making the Initial Payment of AUD7.6 million, WMT will have a period of up to 36 months in which to complete a bankable feasibility study on the project. WMT will be obligated to expend a minimum of AUD3.25 million during the first 15 months of this period and an aggregate of AUD6.5 million during the first 24 months of the period.
Should WMT withdraw from the project or not make its minimum payment commitments then WMT will return 100% of the project to Anglesey in good standing and free of any additional liabilities. All new data generated by WMT and all payments made to Anglesey by WMT will be retained by Anglesey.
The principal terms of payment are:
i) Initial non-refundable deposit
ii) Initial cash payment on completion of Formal Agreement
iii) Initial payment in shares of WMT* on completion of Formal Agreement to the value of
iv) Deferred cash payment on completion of feasibility study
v) Deferred payment in shares of WMT* on completion of feasibility study
* WMT may elect to pay cash in lieu of shares for both the initial
and deferred payments.
During the feasibility study, WMT has indicated to Anglesey that it intends to carry out a major surface drilling programme, rehabilitate the Morris Shaft, extend the underground development and carry out an underground drilling programme. WMT estimates the cost of this work to be between AUD12 and AUD15 million and hopes to complete the work within 2 years.
The Board of Anglesey has carefully considered the proposal from WMT and believes that this represents a good opportunity for the Company to realise value in respect of the Parys Mountain Project. The Board welcomes WMT’s agreement to make a major investment into the Parys Mountain project to move it towards production.
The Board feels that this offer with its cash components will enable the Company to rapidly develop other mineral opportunities consistent with the Anglesey’s stated long term objectives. The shareholding in WMT which is likely to be generated as a result of the transaction would enable the Company to maintain an indirect minority interest in the future long term success of Parys Mountain.
Bill Hooley, Chief Executive of Anglesey commented, “We welcome WMT as an investor in the Parys Mountain project. It brings a high degree of technical expertise combined with a sound balance sheet including sufficient working capital to carry out its planned objectives. Anglesey continues to pursue its 50% interest in Labrador Iron Mines Holdings Limited which is developing a direct shipping iron ore project in Labrador, Canada which it intends to bring to production during 2009. With the WMT planned transaction, Anglesey will be in an excellent position to develop other mineral interests including several that are under current consideration.”
WMT is listed on the Australian Stock Exchange (ASX:WMT). It has a number of exploration projects in Tanzania, Australia and the Americas. The corporate and technical management team has wide ranging experience in mine and project management and development with both junior and major companies. Further details can be found at www.westernmetals.com.au
For further information:
Bill Hooley, Chief Executive +(44) 1492 541981
Ian Cuthbertson, Finance Director +(44) 1248 361333
John F. Kearney, Chairman +(1) 416 362 6686
Parkgreen Communications +(44) 20 7851 7480
|Anglesey Mining plc
Parys Mountain, Amlwch,
Anglesey, LL68 9RE, UK
|Phone +44 1248 361333