Last checked at 6 Nov 2012 13:48
Anglesey Mining plc LSE:AYM
6 November 2012
LIM C$30 million financing closes - Anglesey subscribes C$1.5 million
Anglesey Mining plc is pleased to announce that its associate Labrador Iron Mines Holdings Limited has completed its previously announced bought deal public offering of C$30,000,000 in common shares of LIM at a price of C$1.00 per common share. Canaccord Genuity Corp. acted as the sole underwriter.
Anglesey further announces that it has participated in the financing by the purchase of 1,500,000 LIM common shares priced at C$1.00 each for a total consideration of C$1,500,000 (approximately £935,000). The funds for this share purchase have come from Anglesey's working capital. The Anglesey directors believe that its remaining working capital will be sufficient to sustain Anglesey and to finance the completion of the scoping study on the Parys Mountain project which is currently in progress.
LIM issued 30,000,000 common shares pursuant financing and now has 97,763,307 common shares outstanding. Following this issue and the acquisition of new LIM common shares, Anglesey holds 19,289,100 LIM shares which represent 19.7% of the increased capital of LIM.
LIM intends to use the net proceeds from the financing for working capital and general corporate purposes.
LIM has also granted the underwriter an over-allotment option to purchase up to 4,500,000 additional common shares, exercisable at any time for a period of 30 days after and including the closing date of the financing, at a price equal to the offering price of C$1.00 per common share.
Anglesey has made this investment because it believes that LIM has a very positive future given its high grade resource base, substantial infrastructure, the recovering iron ore price and its first independent producer status in the Labrador Trough; further Anglesey wishes to maintain a significant as possible stake in LIM to ensure that it is involved in any future developments by LIM.
Bill Hooley, Chief Executive of Anglesey said "We are pleased to participate in this financing which has permitted our holding in LIM, which we believe to be significant and strategic, to be maintained as high as possible. However at just under 20% we are no longer restricted by many Canadian regulations and we are freer to deal our position if considered prudent. We will continue use our strategic position in LIM to ensure the best possible outcome for Anglesey shareholders and we have no current intention of reducing this holding. We have retained sufficient funds in Anglesey to complete work on the current resource estimate and Scoping Study on Parys Mountain and to move that project forward. We also continue to look at potential projects throughout the world that match our development criteria."
It is anticipated that there will be no change in Anglesey's treatment of its investment in LIM in the financial statements as a result of the transactions and LIM will continue to be accounted for as an associate.
About Labrador Iron Mines Holdings Limited
Labrador Iron Mines (LIM) is Canada's newest iron ore producer with a portfolio of direct shipping (DSO) iron ore operations and projects located in the prolific Labrador Trough. Initial production commenced at the James Mine in June 2011, with the sale of 400,000 tonnes of iron ore recorded in the first start-up year. The first full production season commenced in April 2012, with nine cape-size shipments totalling approximately 1,456,000 dry tonnes of iron ore sold in the seven months ended October 31, 2012.
The James Mine is connected by a direct rail link to the Port of Sept-Iles, Qu©bec. The project also benefits from established infrastructure including the town, airport, hydro power and railway service. Starting with the James Mine and leading to the development of the expanding Houston flagship project, LIM's objective is to provide shareholders with long-term value with a plan to increase production towards 5 million tonnes per year from a portfolio of 20 iron ore deposits in Labrador and Quebec, all within 50 kilometres of the town of Schefferville.
LIM is currently the only independently-owned Canadian iron ore producer listed on the Toronto Stock Exchange and trades under the symbol LIM. For further information see www.labradorironmines.ca.
About Anglesey Mining plc
Anglesey now holds 19.7% of Toronto-listed Labrador Iron Mines Holdings Limited which is producing iron ore from its James deposit, one of LIM's twenty direct shipping iron ore deposits in western Labrador and north-eastern Quebec.
Anglesey is also carrying out development and exploration work at its 100% owned Parys Mountain zinc-copper-lead deposit in North Wales, UK.
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
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