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.

LIM will grant the underwriters an overallotment option for additional common shares equalling 15 percent of the underwritten shares.

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.

Anglesey Mining (LON:AYM) today told investors that a new marketing deal has been signed for the Schefferville iron ore production.

The company’s 33 per cent owned associate Labrador Iron Mines (TSE:LIM) owns the mining operation.

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.

Under the terms of the 2011 agreement LIM received the gross price less IOC’s charges for handling, loading, shipping and sales costs.

The IOC ships LIM’s ore to Asia using its existing transport infrastructure. And through its marketing organization it sells the iron to customers in the spot market.

One advantage of the agreement, from LIM’s point of view, is that it utilises Cape Size Ocean going ships which have lower freight costs than the alternative Panamax vessels.

“This is excellent news for Anglesey and LIM, and we expect the market to view this extremely favourably,” Ambrian Partners mining analyst Duncan Hughes said in a note to clients.

“We believe Anglesey’s share price has been hampered by concerns over long-term sales contracts; this development removes a significant level of risk from the company as production is now secured for 2012. 

“Pricing is confidential, but we expect the terms to be along the lines of the 2011 contract, where ore was sold by LIM at spot less a handling charge by IOC.”

Ambrian repeated a ‘buy’ recommendation and an 81p price target for Anglesey Mining shares today.

This afternoon Anglesey relayed LIM’s third quarter results to investors in London.

LIM revealed that it received iron ore sale proceeds of C$26 million from two shipments and it had invested C$30 million into the continued development of the James mine. Overall the group made a C$1.7 million loss during the three month period.

The company also confirmed that the output from the mine is still considered, in the accounts, as pre-commercial production.

“Mining will continue at the James North and James South deposits in 2012, with planned total ore mined of between 2.5 to 3.0 million tonnes, together with approximately 3.5 million tonnes of waste,” LIM said.

Anglesey says that operations in Labrador have continued to proceed satisfactorily.

LIM began producing iron ore from the James mine in June. The mine forms part of the Schefferville group of mines in northern Canada.

Currently 178,000 tonnes of iron ore is stockpiled at the port of Sept-Iles, awaiting shipping in the spring.  LIM has a life-of-mine rail contract with the Quebec North Shore and Labrador railway so that the ore can be transported to the port. 

Last month LIM revealed that 1.2 million tonnes of iron ore was mined and trucked to the port ahead of processing and shipping, during the period ending December 31 2011.

In total, 440,000 tonnes of direct railing ore was produced, at an average grade of 64.9 per cent iron, during the period. Of that, 340,000 tonnes were railed directly to the port of Sept-Iles without further processing. 

Around 572,000 tonnes of ore was fed to the Silver Yards plant. This yielded around 232,000 tonnes of lump and sinter fine products.

The iron was sold in three separate shipments - with gross sales prices of US$176, US$121 and US$137 respectively. Each of the shipments was sold in the spot market.

Anglesey Mining (LON:AYM) today told investors that a new marketing deal has been signed for the Schefferville iron ore production.

The company’s 33 per cent owned associate Labrador Iron Mines (TSE:LIM) owns the mining operation.

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.

Under the terms of the 2011 agreement LIM received the gross price less IOC’s charges for handling, loading, shipping and sales costs.

The IOC ships LIM’s ore to Asia using its existing transport infrastructure. And through its marketing organization it sells the iron to customers in the spot market.

One advantage of the agreement, from LIM’s point of view, is that it utilises Cape Size Ocean going ships which have lower freight costs than the alternative Panamax vessels.

Currently 178,000 tonnes of iron ore is stockpiled at the port of Sept-Iles, awaiting shipping in the spring.  LIM has a life-of-mine rail contract with the Quebec North Shore and Labrador railway so that the ore can be transported to the port. 

LIM began producing iron ore from the James mine in June. The mine forms part of the Schefferville group of mines in northern Canada.

Last month LIM revealed that 1.2 million tonnes of iron ore was mined and trucked to the port ahead of processing and shipping, during the period ending December 31 2011.

In total, 440,000 tonnes of direct railing ore was produced, at an average grade of 64.9 per cent iron, during the period. Of that, 340,000 tonnes were railed directly to the port of Sept-Iles without further processing. 

Around 572,000 tonnes of ore was fed to the Silver Yards plant. This yielded around 232,000 tonnes of lump and sinter fine products.

The iron was sold in three separate shipments - with gross sales prices of US$176, US$121 and US$137 respectively. Each of the shipments was sold in the spot market.

The Canadian mining firm revealed that 1.2 million tonnes of iron ore was mined and trucked to the port ahead of processing and shipping, during the period ending December 31 2011.

In June LIM began producing iron ore from the James mine, which forms part of the Schefferville group of mines in northern Canada. The operation is currently considered to be in a pre-production stage comprising start-up and testing operations, it said.

In total, 440,000 tonnes of direct railing ore was produced, at an average grade of 64.9 per cent iron, during the period. Of that, 340,000 tonnes were railed directly to the port of Sept-Iles without further processing.

Around 572,000 tonnes of ore was fed to the Silver Yards plant. This yielded around 232,000 tonnes of lump and sinter fine products.

LIM said that the grade of ore mined in 2011 was higher than the average resource grade.

Furthermore it revealed that nearly 412,000 tonnes were sold, via its agreement with Rio Tinto’s Iron Ore Company of Canada (IOC), into Asian markets.

The iron was sold in three separate shipments – with gross sales prices of US$176, US$121 and US$137 respectively. Each of the shipments was sold in the spot market. And LIM received the gross price less IOC’s charges for handling, loading, shipping and sales costs.

LIM said it continues to review options for marketing iron ore during 2012 and in subsequent years.

It says that it is evaluating the optimum route to achieve these sales, while still maintaining maximum flexibility and independence.

“Marketing discussions are continuing with potential customers, both in Europe and in Asia. The company is also continuing discussions with a number of internationally recognized commodity traders with specialist knowledge of the iron and steel industry,” LIM said 

“The company has not yet concluded any agreements for the sale of any iron ore beyond 2011, but expects to conclude shipping and sale arrangements prior to the start-up of operations (following the winter break) in the spring.”

It also told investors that detailed planning is now underway for the coming year. It expects to mine between 2.5 and 3 million tonnes of iron ore, producing around 2 million tonnes of saleable product – including a 187,000 tonne stockpile that’s already at the port.

Meanwhile it says the Phase 3 expansion of the processing plant is currently under way. Civil construction work is on schedule, with steel erection and commissioning expected by June.

It also continues work on Stage 2 of the Houston project, in which it aims to prepare the deposits for production next year.

Anglesey Mining shares gained 1p, or 3.5 per cent, to trade at 29.5p on the London Stock Exchange this afternoon.

The firm hopes to identify near surface areas of a target called the engine zone.

The wholly owned Parys Mountain project is located on the island of Anglesey. The copper-zinc-lead project has over 7 million tonnes, at over 9% combined metal, in historic resources.

With this current exploration push Anglesey Mining plans to reassess the project. The findings will contribute to a review of the mining and production options available for the White Rock and Engine Zone parts of the project.  

Anglesey Mining is aiming to complete this review in the second quarter of this year.

Last month an induced polarisation (IP) survey was carried out as well as a deep overburden (DOB) survey. The results have now been received and analysed. Anglesey says that this has provided good guidance for the location of holes for the drill programme.

Work is now focused on the first of four holes in the initial stage of drilling. Anglesey Mining says that drilling is progressing satisfactorily. The first hole will be drilled to a target depth of 220-250 metres.

The drill programme is expected last for five to six weeks. A further 8 holes may be drilled after that depending on results.

Previous drilling traced the engine zone upwards to a depth of about 200 metres.

Anglesey says that the engine zone could enhance a potential mining operation at the White Rock, a nearby area of the Parys Mountain project. However it must prove that the engine zone is in these shallower depths in sufficient size.

It added that planning permissions for such a mining operation are still in place.

Parys Mountain is the site of an old mine on the island of Anglesey in North Wales. The copper-zinc-lead project has a historical resource of 7 million tonnes with combined metal grades of over 9 per cent.

The company said the initial exploration activities will last about a week. This will be the first stage in a review of the development options available for the project.

The company will carry out an Induced Polarisation (IP) geophysical survey and an associated Deep Overburden (DOB) geochemical survey. With this work AYM is targeting the potential location of an area of mineralisation known as the Engine Zone. 

It explained that the Engine Zone has been shown to be a major resource bearing structure in the area. 

The mineralised zone can be seen in the Morris shaft at depths of 300-400 metres below surface. 

AYM added that the zone has been traced up-dip to a depth of about 200 metres and the new exploration programme is aimed at determining its location closer to surface. 

Later this month the company will carry out a drill programme targeting the Engine Zone above the 200 metre level. 

Initially 4 holes will be drilled, with a total depth of around 800 metres. Subject to results Anglesey may drill another six to eight holes, for an additional 1,200 metres.

According to AYM the location of the Engine Zone at these shallower locations is likely to be close to the shallow White Rock zone which was identified during a drilling programme which took place between 2006 and 2008. 

“If this zone extension can be identified then the economics of a relatively small decline-based mining operation on both the White Rock and shallow Engine Zones will be much enhanced,” AYM said.

It added that a 2007 scoping study on White Rock was completed in 2007 and planning permission is already in place for a mining operation and a processing plant.

“In parallel with the drilling programme a review of the current options available for the development of Parys Mountain will be carried out,” AYM added. 

“This review will initially concentrate on near term alternatives including the shallow White Rock and Engine zones but could be expanded to include the entire resource base and exploration potential at Parys Mountain. 

“The results from this review will be expected by spring 2012 and will provide sufficient information to enable the future development plan for the project to be determined. In addition these results will provide guidance on the best commercial route for such development and the extent of any third party technical and financial input that may be required.”

“Looking into next year we are confident that we can maintain the 40,000 ounce a year run rate,” he said.
“Depending on a number of things in Zimbabwe we may even be able to increase that further slightly as the year progresses. We are busy exploring and developing additional ore bodies.

“And depending on the exploration success we may be able to start adding some small but incremental tonnage into the Blanket plant from these operations during the latter part of 2012.”

Ambrian Capital recently described our next guest, Anglesey Mining (LON:AYM), as the top value play in the small-cap sector.

It owns a 33 per cent stake in the Canadian firm Labrador Iron Mines, which has begun shipping ore to China.
However the focus is shifting towards its other major project – the Parys Mountain zinc-copper-lead deposit in North Wales.

“After a number of years in which the group has concentrated its efforts largely on LIM we are now expanding our review of Parys Mountain with the aim of forming a clear view on the best way to move its development forward,” said chairman John Kearney recently.

An exciting roster is completed by EurOmax Resources (CVE:EOX), a gold and copper explorer focused on resource-rich areas of Bulgaria, Macedonia and Serbia.

In all it has four advanced projects in areas with good road infrastructure and access rail, power and water – vital ingredients in building viable mining projects.

Its last update came from the Ilovitza copper-gold porphyry project in south-eastern Macedonia, where metallurgical tests were encouraging.

The company said it achieved an 84 percent copper recovery, 58 percent gold recovery and 68 percent silver recovery.

Dr Quinton Hennigh, the EurOmax’s technical adviser, said: "We are very pleased with this year's progress at Ilovitza.

"Our initial flotation tests have proved positive, the 2011 drill program has dramatically increased the size of the system and we have now formally applied for an exploitation concession on our project."

Spaces are limited and registration is essential  *REGISTER YOUR ATTENDANCE HERE*

Thursday the 8th December 2011, Chesterfield Mayfair Hotel, 35 Charles Street, Mayfair, W1J 5EB (Charles Suite). The presentations will start at 6:00pm and finish at approx 8:00pm. After the presentations are complete the directors will also be available to take questions during a free canapé and wine reception. Details on the presenting companies can be found on www.proactiveinvestors.co.uk.

Proactive Investors have run over 250 investor presentations across all the key financial centres.

As landmarks go, it was a pretty significant one – both for associate Labrador Iron Mines (TSE:LIM), and London-listed Anglesey Mining (LON:AYM), which owns 33 per cent of LIM.

At 4.50 am eastern daylight time, the cargo vessel Salt Lake City departed the Port of Sept-Iles carrying 167,167 wet tonnes of iron ore.

This was the first ever export shipment by LIM, and the culmination of years of hard work.

Broker Ambrian Capital calls the delivery “hugely significant” as it marks the point Labrador finally gets paid for its efforts, which in turn minimises the risk associated with the project.

“(It is also) crucial in terms of timing given that iron ore prices are still at historic highs, ensuring that investors in this company benefit ‘here and now’ from the high prices, rather than betting on other developing peers targeting production in a few years time, when high iron ore prices are not a given,” said analyst Nick Mellor.

The ore is being sold via a deal with the Iron Ore Company of Canada, an associate of Rio Tinto, which has committed to sell all of LIM’s iron ore production for 2011. 

The sale price for the iron ore is based on the actual realised prices to Chinese customers, less an allocation for handling, loading, shipping and sales costs.

"This is a momentous day in the history of LIM and is the culmination of six years of endeavour,” said LIM chief executive John Kearney.

“We are very proud to join the limited group of Canadian mining companies exporting iron ore and we are particularly proud that we have done so whilst maintaining our independence and without taking on debt. 

“We now look forward to expanding on this first sailing in the months and years to come."

LIM began production earlier this year from its operations in western Labrador and north-eastern Quebec. 

The phased development project will ultimately see LIM bring 20 direct shipping iron ore deposits – collectively known as the Schefferville project - online in the area.

It said that the Salt Lake City vessel, carrying 167,167 wet tonnes of iron ore, departed from the Port of Sept-Iles at 4.50 am (eastern daylight time) today.

The ore is being sold through LIM’s deal with the Iron Ore Company of Canada (IOC) – an associate of Rio Tinto – which has committed to sell all of LIM’s iron ore production for 2011. The sale price for the iron ore is based on the actual realized prices to Chinese customers, less an allocation for handling, loading, shipping and sales costs, Anglesey explained.

"This is a momentous day in the history of LIM and is the culmination of six years of endeavour,” said LIM chief executive John Kearney.

“We are very proud to join the limited group of Canadian mining companies exporting iron ore and we are particularly proud that we have done so whilst maintaining our independence and without taking on debt. 

“We now look forward to expanding on this first sailing in the months and years to come."

Last month LIM began full scale production at the James mine, which forms part of the Schefferville group of mines.

It said that a total of about 700,000 tonnes of ore will have been mined and some 1,700,000 tonnes of waste and overburden will have been removed by the end of September. About 250,000 tonnes of high grade direct railing ore, included in the above total, will have been mined of which almost 200,000 tonnes will have been sent to the Port of Sept-Iles.

Also, approximately 400,000 tonnes of ore will have been processed through the Silver Yards plant, LIM said. 

LIM began production earlier this year from its operations in the Schefferville area of western Labrador and north-eastern Quebec. The phased development project will ultimately see LIM bring 20 direct shipping iron ore deposits – collectively known as the Schefferville project - online in the area.