Anglesey Mining (LON:AYM) today said that mining operations have begun for the 2012 season at the James Mine in Labrador

The AIM-quoted firm has a 26 per cent stake in Labrador Iron Mines, which operates the James Mine and a number of associated operations in the Schefferville area of western Labrador and north-eastern Quebec.

The James mine is the first of 20 direct shipping projects to be developed by LIM. Last year was the first year the mine was in operation and after the Canadian winter mining is now restarting.

The first train carrying ore from the Silver yards processing plant to the Port of Sept-Iles left on Wednesday April 4.

In 2012, LIM is expecting to mine between 2.5 and 3 million tonnes of ore, together with 3.5 million tonnes of waste.

It expects to be mining at a rate of 15,000 tonnes per day. The produced ore will be split in two parts, direct rail ore and plant feed, with the latter being processing at Silver Yards.

Silver Yards will restart in May. And it will remain in operation for seven months until November, subject to weather conditions.

Meanwhile LIM will also continue to expand the plant, with a phase 3 work programme designed to increase production capacity to 2 million tonnes per year. The project is expected to be completed by mid-2012.

The expansion will increase plant throughput to 12,000 tonnes per day and improve weight recovery to over 75 per cent, LIM said.

Currently LIM expects between 1.8 and 2 million tonnes of ore will be treated at Silver Yards this year, yielding 1.25-1.5 million tonnes of saleable product.

Along with a targeted 500,000 to 750,000 tonnes of ‘rail’ ore, LIM plans to produce 2 million tonnes of saleable iron product by the end of the mining season.

Like last year, LIM is using Rio Tinto’s Iron Ore Company of Canada (IOC) to transport and market its iron ore to Asian customers.

IOC is Canada’s largest iron producer and by harnessing certain economies of scale the arrangement allows LIM to ship more ore to export markets. The precise terms of the arrangement are confidential.

The Houston deposits, situated about 15 km southeast of Labrador’s (LIM) currently operating James Mine and Silver Yards processing plant, have a combined measured and indicated resource of 22.1 million tonnes at an average grade of 57.3% Fe.

Subject to permitting, LIM said expects initial mine development at the Houston deposit, including construction of a haulage road, a railway siding and pre-stripping of the ore will commence in the summer and autumn of 2012, leading to commencement of production of ore in the second half of 2013.

The opening up of the Houston deposits is the second phase of LIM’s development plan for its 100% owned Schefferville Area direct shipping iron ore properties in the Labrador Trough.

Anglesey Mining, which owns 26 per cent of LIM, added that the latest diamond drilling programme at its 100 per cent owned copper, lead and zinc prospect at Parys Moutain in Wales had also been completed. 

The total programme of seven holes comprised 860 metres of drilling and tested the continuity of the Engine Zone at between a depth of 200 metres and surface. Samples from all seven holes have been sent for assay and results are expected within a few weeks.

“Geologically it would appear that the Engine Zone is present in mineable widths from the bottom of the Morris Shaft up to around 180 metres deep but is unlikely to be easily mineable at shallower depths,” Anglesey said.

A further series of 2 or 3 holes has been planned and drilling has commenced on the first of these holes. This initial 2 to 3 hole programme is expected to be completed in around 8 weeks' time and assuming satisfactory results could be immediately extended.

Anglesey Mining (LON:AYM) this afternoon confirmed that it’s associate Labrador Iron Mines Holdings (TSE:LIM) has now closed its C$71.6 million equity funding.

The AIM quoted firm is a major shareholder in LIM.

LIM is now issuing 11,500,000 new common shares and 1,750,000 tax efficient flow-through shares, raising C$60,950,000 and C$10,675,000 respectively.

The cash will be used to fund an upgrade and expansion of the Silver Yards project, as well as developing additional transport infrastructure. 

There is also an option for the underwriters, led by Canaccord Genuity, to sell an additional 1.725 million shares over the next 30 days. These shares will be sold at C$5.30 a share.

Anglesey's proportionate stake in LIM has been diluted to 26.4 per cent, although this could reduce further to 24.9 per cent should the full-over allotment option be exercised.

Anglesey Mining (LON:AYM) said its 33 percent owned associate Labrador Iron Mines (TSE:LIM) has raised C$71.6 million to finance the development of its iron ore projects in Canada.

This morning, Anglesey told investors that LIM has filed a prospectus in connection with an overnight public offering of its shares.

Later in the day, the companies unveiled the details of the fundraising. LIM is selling 11.5 million shares at a price of C$5.30 per share and an additional 1.75 million flow-through shares at C$6.10 to raise a total C$71.63 million.

Under the terms of its agreement with its underwriters led by Canaccord Genuity, LIM has granted them an over-allotment option for 1.73 million shares exercisable within 30 days for C$9.1 million in total.

The proceeds will be used for upgrades and expansion of LIM's Silver Yards processing plant, development of the Houston project, which is currently undergoing environmental assessment and planning, and further exploration at its mineral properties.

Earlier this month, LIM further de-risked its Schefferville projects by reaching a participation agreement with a First Nation, which gave their consent to the Schefferville, covering their entire life of mine.

The announcement came just two days after Anglesey announced a new marketing deal for Schefferville iron ore production.

Through the deal Rio Tinto’s Iron Ore Company of Canada (IOC) will again facilitate the sale of LIM’s iron ore into Asian markets.

Around 412,000 tonnes of iron ore was sold on LIM’s behalf through a similar arrangement last year.

After the First Nation agreement was signed, Ambiran Partners repeated its ‘buy’ recommendation and 92 price target on the stock.

“This continues LIM’s recent run of announcements that further de-risk its iron ore projects as it removes the potential for disruption to the operations going forward. This is especially significant given that a local Innu tribe blocked access to the project for a short time in June 2010.”

Ambrian remains upbeat on Anglesey’s prospects and expects significant newsflow going forward to come from drilling of its Parys Mountain property, where results are expected in the first quarter and where the ramp-up is continuing.