Anglesey Mining plc              

 

2 September 2008                                                                            LSE:AYM

Interim Management Statement for the period to 27 August 2008

Activities at the groupís major project, the development of iron ore mining in Labrador, Canada near the town of Schefferville, have been significantly increased during the period since April 2008. Based on the companyís current plans this project is fully funded through to first production in 2009 and development activities are proceeding rapidly in all areas - geology, metallurgy, processing, transportation, negotiations and involvement with First Nations and product marketing.

At Parys Mountain in Anglesey, North Wales, an offer to purchase and develop the Parys properties was received from Western Metals Limited of Perth Western Australia in April 2008. Since that time Western has been carrying out due diligence and negotiations on a definitive agreement between the companies have continued. As at the date of this report no formal agreement has been signed. Shareholder approval will be required for this transaction.

Labrador Iron

Further significant progress has been made with the development of the Labrador iron project and its move towards first production of direct shipping lump and sinter fines iron ore, scheduled for 2009.

The team required to drive the project forward has been recruited and during the summer has carried out a number major tasks including the mining and crushing of an 8,000 tonne bulk sample; the commencement of an confirmatory drilling programme on a number of deposits with the aim that compliant resource estimates will be produced on several of these during 2008; the commencement of engineering work to support this resource estimate and to prepare the plans and specifications required for first production including detailed metallurgical testwork to determine the most efficient process route to be utilised; detailed discussions with railroad and port operators to put in place an integrated transport facility for the iron ore; continuation of environmental baseline studies in conjunction with the project approval process and work on marketing the iron ore products.

On 24 July 2008 the company and the Innu Nation of Labrador announced that they had signed an Impact Benefit Agreement (IBA) committing to an ongoing relationship between the Innu Nation and Labrador Iron Mines Limited. The agreement was signed following the earlier execution of a Memorandum of Understanding between the parties.  

The IBA is a life of mine agreement that establishes the processes and sharing of benefits that will ensure an ongoing positive relationship between Labrador Iron Mines and the Innu Nation. In return for their consent for and support of the Labrador Iron Mines project, the Innu Nation and their members will benefit through training, employment, business opportunities and financial participation in the project. This is a significant step in the development of the project which would not have been possible without this agreement. Discussions with other First Nations groups continue.

The Schefferville project, managed by the groupís 50% owned associate, TSX-listed Labrador Iron Mines Holdings Limited, is making good progress towards its target of achieving commercial production of iron ore from the properties by 2009.

Parys Mountain

Work on site has been cut back during the period of Western Metalís due diligence and reductions in the price of zinc have adversely affected the economics of the companyís proposed White Rock development. In July 2008 the company was granted a consent to discharge water from its Morris Shaft, an essential step in the re-starting of mining operations.

The results of the most recent White Rock drilling programme which was completed earlier in the year are as follows:

 

Hole #

From

To

Width m

Cu%

Pb%

Zn%

Ag ppm

Au ppm

WD 10

21.2

53.8

32.6

0.91

5.44

9.67

77.0

1.04

Includes

21.2

30.2

9.0

1.27

8.14

15.29

130.0

2.68

 

 

 

 

 

 

 

 

 

WD 11

119

145.7

26.7

0.50

2.59

5.02

36.6

0.92

Includes

119

132.7

13.7

0.78

3.98

7.49

44.3

1.00

Includes

127.3

132.7

5.4

0.66

5.51

10.46

68.5

1.97

 

 

 

 

 

 

 

 

 

WD12

50.9

55.0

4.1

0.76

1.76

3.87

99

0.26

 

 

 

 

 

 

 

 

 

and

58.2

183.7

125.5

0.10

0.74

1.52

16

0.25

Includes

126.2

153.7

27.5

0.18

1.64

2.81

21

0.27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WD13

157.3

188.4

31.2

0.20

1.42

2.32

12

0.19

Includes

169.5

185.0

15.5

0.33

2.26

3.45

15

0.20

 

These results should be read with caution as the drill-hole intersections were not normal to the dip of the White Rock Zone and the indicated widths in the table above will be larger than the true zone width. This is particularly true for WD 10 which was drilled vertically down the zone and was intended to collect samples for metallurgical testing purposes.

Financial

The groupís 50% owned Labrador operations were funded by the Canadian IPO in December 2007 and January 2008 and are expected to proceed towards production without any further recourse to shareholders. Within the next few months the group will require further funds for its ongoing management, administration and Parys maintenance expenses. The group has no revenues.

Outlook

The iron ore market is robust and is forecast to remain strong. The group believes that it is well placed to take advantage of this strength as it brings the Labrador iron project into production in 2009.

The outlook for base metals is less certain, the price of zinc having fallen significantly since its 2007 peak thereby affecting the groupís own plans for the next stage of Parys Mountain. In contrast, copper prices have remained historically high, and more than half of the value of the Parys Mountain deposits is in copper, generally at deeper levels than the zinc which is found near-surface particularly in the White Rock area.

 

About Anglesey Mining

Anglesey Mining plc is a UK based company listed on the London Stock Exchange (LSE:AYM) with 100% ownership of the Parys Mountain polymetallic base metal project in North Wales, and a 50% interest in Labrador Iron Mines Holdings Limited (TSX:LIR) which manages the Schefferville iron ore project in Labrador, Canada.  

 

For further information:

 

Bill Hooley, Chief Executive

+(44) 1492 541981

Ian Cuthbertson, Finance Director

+(44) 1248 361333

 

mail@angleseymining.co.uk                                          www.angleseymining.co.uk

 


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  Anglesey Mining plc
Parys Mountain, Amlwch,
Anglesey, LL68 9RE, UK
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