28 May 1998
ANGLESEY LITIGATION SETTLED
Anglesey Mining plc is pleased to announce that the outstanding litigation concerning its Parys Mountain mine property at Anglesey in Wales has been settled.
The company had been sued in the Canadian courts in early 1996 by Intermine Limited, a holder of a royalty interest in the property, alleging breach of contract and claiming title to the Parys Mountain property or damages of Can. $96 million. Under an agreement entered into in 1984 Intermine was entitled, together with Parys Mountain Mines Limited, to a royalty of 15% of net profits on production from the Parys Mountain mine and Anglesey had the right to purchase one half of that royalty. Anglesey acquired Parys Mountain Mines Limited in September 1997.
Under a settlement agreement, Anglesey will acquire from Intermine and Parys Mountain Mines Limited, their rights and claims to the old 15% royalty and will issue to Intermine 1.5 million new ordinary shares.
Under a further new agreement Intermine will be entitled to a royalty of 4% of net profits from the operation of the Parys Mountain mine. Anglesey will have the option of buying out this royalty, initially for a price of Can. $1 million, increasing to Can.$2 million after five years or, if purchased after Anglesey has committed to put the mine into production, for the net present value of the royalty. Unless the royalty is bought out, Anglesey will make annual payments to Intermine of Can.$50,000 per annum (approximately £22,000) until the mine is in production.
Commenting on these developments, chairman John Kearney said "This is a fair settlement for both parties. Anglesey has reduced the net profits royalty to 4% and has the option to buy it back at any time. Intermine becomes a shareholder in Anglesey and will participate in the future fortunes of the company both as a shareholder and by means of a reduced royalty interest in the Parys Mountain mine."
"Settlement of the litigation on very satisfactory terms has removed a cloud that was lying over Anglesey. We are pleased to be able to put the litigation behind us. Now we can once again focus our efforts on the development of the property."
The Parys Mountain property is the only known undeveloped polymetallic mineral deposit in the United Kingdom and contains an important geological resource of 6.5 million tonnes with a combined average grade of over 10% zinc, copper and lead together with appreciable quantities of gold and silver. Anglesey is currently carrying out a drilling programme on the property with the objective of increasing the overall geological resource base at Parys Mountain.
Contacts : Ian Cuthbertson John F. Kearney Company Secretary Chairman (44)1248 361333 (1)416 362 6686
|Anglesey Mining plc
Parys Mountain, Amlwch,
Anglesey, LL68 9RE, UK
|Phone +44 1248 361333