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Anglesey Mining - Report for half year ended 30 September 2010
25 November 2010
Report for the half year ended 30 September 2010
Chairmans statement and management report - November 2010
We are pleased to report that during the half year ended 30 September 2010
and up to date, excellent progress has been made with the ongoing
development of Labrador Iron Minesâ (LIMâs) iron ore projects in Western
Labrador and Quebec, currently the groupâs main activity.
Since on-site
construction commenced in early September 2010, the rate of advance
indicates that the plant and accommodation camp for the first phase of Stage
1 are on track to be substantially completed by the end of calendar 2010;
mining and production activities are planned to commence in April 2011.
Labrador Iron Ore
Labrador Iron Mines, the groupâs 41% owned Toronto Stock Exchange listed
associate, is advancing its Schefferville direct shipping iron ore project
towards production.
LIM had respected and did not try to cross the barrier
that had been erected in June 2010 which had restricted normal access from
the town of Schefferville to LIMâs properties in Western Labrador and caused
delays in the exploration and development of the projects.
Following an
agreement in early September with the Innu MatimekushâLac John to remove the
barriers, construction and installation work is being carried out on site.
Mine site preparation at the James Mine has commenced with the development
of the haul road, clearing and grubbing of the entire mining site and
exposing the ore body.
Development of the first production bench in the mine
will follow.
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.
Construction of the beneficiation plant and associated facilities has
progressed well since early September.
All the piers for the conveyors have
been installed, including those for the radial stackers and the secondary
crusher, and most 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, and the dome roof
structure is being assembled at site and is expected to be installed
shortly.
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, is
currently almost complete and should be available for use over the winter.
In September 2010 LIM entered into an Impact Benefits Agreement (IBA) with
the Naskapi Nation of Kawawachikamach.
Discussions continue with the Innu
Matimekush-Lac John and with the Innu Takuaikan Uashat Mak Mani-Utenam
towards concluding Impact Benefits Agreements.
 LIM has committed to
negotiate in good faith and to respect the rights of the Innu, however, it
should be emphasized that no formal IBA or other agreements have yet been
signed between LIM and either Innu Uashat or Innu Matimekush and several
outstanding issues remain to be resolved.
In the six months ended 30 September 2010 LIM made significant progress in
its permitting activities with the Government of Newfoundland and Labrador
and has now received from the Government of Newfoundland and Labrador all
major permits that are required to advance the first phase of Stage 1 of its
Schefferville Projects in Labrador through construction and into mining
operations.
The 2010 summer exploration programme has been completed with 4,500 metres
of drilling and 1,400 metres of trenching 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.
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 December and to commence production activities in April 2011.
The
target is production of about 2 million tonnes of iron ore in 2011, which
assumes completion of construction, plant commissioning and a satisfactory
start-up of mining operations in the second quarter of calendar 2011.
Parys Mountain
We continue to believe that there is a significant value in the groupâs 100%
owned Parys Mountain zinc/copper/lead property and although the current
management focus is on Labrador we are continuing to talk with interested
parties in our efforts to realise that value for shareholders.
Financial
The loss for the six month period was £756,132 (2009 - £368,100), which
included an exchange rate loss on cash held in Canadian dollars of £149,974
(2009 â nil) and the groupâs share of the loss in Labrador, largely
comprising administration expenses, of £407,016 (2009 - £226,880).
Development expenses capitalised in respect of Parys Mountain amounted to
£27,827 (2009 - £52,245).
The group has no revenues from the operation of
its properties.
At the period end the group had cash in treasury of £2.4
million and LIM had in excess of Canadian $35 million (£21 million).
Outlook
Recently there has been a strengthening in the price of iron ore, with
prices reaching over US$160 per tonne (62% iron sinter fines CFR Chinese
ports).
Shipping rates from eastern North America to China in cape-size
vessels is currently around $40 per tonne giving an indicated effective FOB
price of around US$120 per tonne.
The traditional annual benchmark pricing
mechanism for iron ore has now been more or less abandoned with more and
more iron ore being traded against a prior one month spot average
determination.
The level of demand in China for all commodities, and in particular iron ore
remains strong.
Analystsâ consensus seems to suggest price forecasts at or
above current levels well into 2011, although some weakening in prices is
possible.
Worldwide iron ore demand is expected to continue to grow through
2012, continuously driven by China, while demand in Europe for iron and
steel appears to be flat, but with some small increase forecast for 2011.
These forecasts should work positively for LIM with first sales of lump ore
and sinter fines expected towards the end of the second calendar quarter of
2011 into what appears will be a positive iron ore market.
The investment in Labrador Iron is the companys major asset.
We believe
that the commencement of production and ore sales by LIM will be a major
milestone and that it will bring to the attention of the market the
significant under valuation of Angleseys shares.
John F Kearney
Chairman
25 November 2010
The full text of the half yearly report and financial statements is
[1]available here.
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About Anglesey Mining plc
Anglesey Mining with its LSE main board listing is primarily focused on its
41% interest in LIM.
In addition to any new projects that may be brought
forward the company owns 100% of Parys Mountain in North Wales with an
historical resource in excess of 7 million tonnes at over 9% combined
copper, lead and zinc.
For further information, please view Anglesey Minings website at
[2]www.angleseymining.co.uk or contact:
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2.
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Bill Hooley, Chief Executive +44 (0) 1492 541981
Ian Cuthbertson, Finance Director +44 (0) 1248 361333
Emily Fenton / Charlie Geller, Conduit PR +44 (0) 207 429 6608 / +44 (0)
7788 554035
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