Anglesey Mining Regulatory News (AYM)

ANGLESEY MINING PLC - IMS and LIM third quarter results

PR Newswire

London, February 15

Anglesey Mining plc LSE:AYM

15 February 2013

Interim management statement and LIM third quarter results

Following LIM's fund raisings in November 2012 and February 2013, AngleseyMining's holding in its associate Labrador Iron Mines (TSX:LIM) has moved from26% to 15.3% of the issued share capital of LIM. In the November financingAnglesey subscribed C$1.5 million (£935,000) to purchase 1,500,000 LIM sharesand now holds 19,289,100 shares. Anglesey currently has the right to purchaseon a non-brokered private placement basis up to 3,000,000 units of one LIMshare and one-half of a LIM share purchase warrant at a price of $1.065 perunit subject to certain conditions for a limited period. The results of LIM'soperations for the period ended 31 December 2012 are described below.

At the company's 100% owned Parys Mountain copper-lead-zinc deposit inAnglesey, new JORC-compliant resources were estimated by consultants MiconInternational based on drilling and other work which was completed in thesummer of 2012. Micon are now close to completing a scoping study for ParysMountain which will help to guide the next steps for the project.

LIM Highlights

"In successfully completing our first full season of production in 2012, weachieved many operational objectives, highlighted by strong operationalperformance, the installation of a new dry process system at Silver Yards,increased rail volumes to the Port and the sale of 10 shipments of LIM's ironore" stated Rod Cooper, President and COO of Labrador Iron Mines. "Over thewinter months, we have been hard at work in anticipation of resuming operationsin the spring. We plan to leverage the operational experience gained over thepast two seasons, combined with strengthened working relationships with keystakeholders, to achieve greater efficiencies and opportunities in the upcomingoperating season."

LIM's Planning for the 2013 Operating Season

"In planning for our 2013 operating season, we are encouraged by the recentstrong recovery in iron ore prices to above $150 per tonne. There are also anumber of factors that indicate strong support in the near term that could havea favourable impact on LIM's early sales revenues in 2013 and we lookingforward to resuming operations in the spring." stated John Kearney, Chairmanand CEO.

Iron ore spot prices have rebounded since September 2012, especially inDecember, and reached a high of approximately US$159 per tonne in early January2013. The current spot price for iron ore is above US$150 per tonne on a 62% FeCFR China basis and has risen over 70% since the market low last September.

LIM's mining operations are seasonal (April to November), with a planned winterclosure from December to March. Detailed planning for the upcoming operatingseason takes place during the winter months.

In advance of the 2013 operating season, LIM carried out the followinginitiatives:

In resuming its planned seasonal mining operations in the spring, LIM willincur regular operating, mining and transportation expenses for the months ofApril and May, prior to receipt of payment from its first sale of iron ore. Asa result, LIM will require working capital of approximately $40 million to fundvarious operating and re-start expenses ($30 million) and certain plannedcapital expenditures ($10 million), including the commissioning of Silver YardsPhase 3 and connection to grid power.

Results of Operations

LIM Outlook

In the near term, operations will focus on LIM's Stage 1 deposits, whichinclude the James Mine (currently operating) and five smaller satellitedeposits and some historical stockpiles located within a 15 km radius of theJames Mine and the Silver Yards processing plants.

LIM has previously stated that resumption of mining operations in April 2013for the 2013 operating season will depend on a number of inter-related factorsincluding being reasonably confident that the forecast world iron ore priceswill continue at levels of US$110 or higher on a CFR China basis at least forthe 2013 operating season (April through November). LIM has been continuouslymonitoring published iron ore price forecasts provided by investment andindustry analysts as well as the futures market for iron ore since the seasonalshutdown of operations in November 2012. Based on this and having regard toincreases in such price during December 2012, January and early February 2013,LIM believes that sufficient confidence levels exist to resume normaloperations in April 2013.

LIM is currently targeting approximately 1.7 to 2.0 million wet tonnes ofsaleable iron ore production in 2013. Cash operating costs in 2013, consistingof mining, processing, rail and transportation and site general andadministrative costs, are expected to be approximately $65 to $70 per tonne ofproduct sold, unloaded at the Port.

LIM Third Quarter Financial Review

During the fiscal third quarter ended December 31, 2012, LIM sold threeshipments totalling 425,500 dry tonnes of iron ore and recognized revenue of$24.7 million (FOB Port of Sept-Îles) from the sale of these shipments. Revenuefor the third quarter was negatively impacted by low realized iron ore prices(i.e. CFR China spot price less value-in-use adjustments).

For the quarter ended December 31, 2012, LIM reported a loss of $16.1 million,or $0.19 per share, which included a depletion and depreciation charge of $5.1million or $0.06 per share. The depreciation and depletion figure represents aperiod charge, primarily on a units-of-production basis, of the cost of theJames mine (including capitalized stripping and dewatering), Silver Yardsprocessing plant, transportation equipment, and infrastructure and siteadministration properties associated with the James mine operations.

During the quarter, LIM invested approximately $13.5 million in property, plantand equipment, which consisted mainly of investments in the Silver Yards Phase3 processing plant, grid connection infrastructure and expansion of the mineaccommodation camp.For the nine months ended December 31, 2012, LIM sold tenshipments totalling 1.6 million dry tonnes of iron ore and recognized revenueof $95.8 million (FOB Port of Sept-Iles). LIM reported a loss of $58.4 million,or $0.79 per share, including a depletion and depreciation charge of $29.3million, or $0.40 per share for the nine months ended December 31, 2012.

At December 31, 2012, LIM had current assets of $48.5 million, includinginventories with a carrying value of $12.8 million and accounts receivable andprepaid expenses of $24.1 million. At December 31, 2012, there were a total of$10.2 million unrestricted cash and cash equivalents and an additional $7.6million in restricted cash.

Current liabilities, consisting of accounts payable and accrued liabilities,the premium liability recognized on the issuance of flow-through shares and thecurrent portion of finance lease obligations and rehabilitation provision, werein aggregate $47.8 million at December 31, 2012. During the quarter, LIMcompleted a bought deal public offering for gross proceeds of $30 million. InFebruary 2013, LIM completed an equity financing for gross proceeds of $29million.

The new JORC-compliant resources estimated by Micon International aresummarised as follows:

Deep Engine Inferred 618,000 1.95 1.90 4.22 23.0 0.2

White Rock Indicated 1,625,000 0.34 2.05 3.84 33.0 0.5

Details of the estimation methods for these resources are set out on thecompany's website and at http://angleseymining.co.uk/news/?p=342.

This new estimate follows a previous report by Micon in 2007 that dealt onlywith the White Rock deposit. The current estimate includes all the knowncontiguous deposits on site and is reported on a JORC Code-compliant basis.With the exception of the 2007 White Rock estimate, the previous resource washistorical (estimated in 1990) and was not JORC Code-compliant. In nowreporting all estimates on a JORC Code-compliant basis the project has beenbrought up to date and put in a position to be properly recognised for futurefunding.

Anglesey is particularly pleased with the work on the Garth Daniel Zone and theNorthern Zone. The Garth Daniel zone had been partially identified in 1990 butbenefitted from a further drilling programme in 2005 and 2006. The currentestimate draws all this information together. The Northern Zone was previouslypoorly identified and without any significant continuity. Micon has now shownsuch continuity to exist and has defined a major resource for two discreetoverlapping structures.

There are several other areas on Parys Mountain that have had exploration anddrilling carried out on them that have not been included in these estimates.These include the area between the Deep Engine Zone and Garth Daniel, and thearea around the Pearl Engine House that was drilled earlier this year. Theseand other targets will be subject to additional exploration in the future, andit is hoped that additional data will enable further continuity to bedemonstrated with subsequent additions to the resource base. Anglesey believesthere is ample scope for significant additions to the resources reported here.

At the appropriate time it is planned to carry out additional development anddrilling to bring some or all of the Inferred mineral resource in to theIndicated mineral resource category. This will be dependent on funding and, insome cases, underground access to these areas.

The scoping study on the potential future development of Parys Mountain beingproduced by Micon is well advanced.

Summary and outlook

Anglesey is encouraged by the recent rise in iron ore price particularly overthe last two months. This now stands at over $150 per tonne CFR China for 62%sinter fines. If this persists then Anglesey believes that LIM could enjoy avery successful year in 2013.

Base metal prices have held their own over the last six months and theforecasts particularly for the zinc market during the next two to three yearsappear to be encouraging for Parys Mountain.

About Anglesey Mining plc

Anglesey currently holds 19,289,100 shares in LIM which comprise 15.3% of LIM'soutstanding share capital.Toronto-listed Labrador Iron Mines Holdings Limited is producing high gradehematite from its James pit, one of LIM's twenty direct shipping iron oredeposits in western Labrador and north-eastern Quebec.

Anglesey is also carrying out exploration and development work at its 100%owned Parys Mountain zinc-copper-lead deposit in North Wales, UK where a JORCCode-compliant resource of 2.1mt at 6.9% combined base metals in the indicatedcategory and 4.1mt at 5.0% combined in the inferred category was published inNovember 2012.

For further information, please contact:

Bill Hooley, Chief Executive +44 (0)1492 541981;

Ian Cuthbertson, Finance Director +44 (0)1248 361333;

Samantha Harrison / Klara Kaczmarek: RFC Ambrian +44 (0)20 3440 6800;

Emily Fenton / Jos Simson: Tavistock Communications +44 (0)20 7920 3155