www.angleseymining.co.uk
26% of Labrador Iron Mines in Canada
100% of Parys Mountain in Wales
Anglesey holds 26% of Toronto-listed Labrador Iron Mines Holdings Limited (TSX:LIM) which is now producing iron ore from its James deposit, one of LIM’s twenty direct shipping iron ore deposits in western Labrador and north-eastern Quebec. Development of other deposits is underway and production of the high grade hematite iron ore is targeted to grow from 2Mt in 2012 to 5Mt in 2015.
LIM’s properties are part of the Schefferville area iron ore district in the Labrador Trough where the Iron Ore Company of Canada mined from 1954 to 1982. See the Labrador Iron Mines website for further details.
Anglesey is also carrying out development and exploration work at its 100% owned Parys Mountain zinc-copper-lead deposit in North Wales, UK where there is estimated to be a total historical resource in excess of 7 million tonnes at over 9% combined copper, lead and zinc.
Anglesey owns 17.8m LIM shares (26%) and has 158m of its own shares in issue.
Anglesey Mining is worth 140 pence a share, says Edison
Anglesey Mining (LON:AYM) is worth 140 pence per share, say analysts at research house Edison.
This valuation means the company's shares are currently trading at a 75 percent discount - at 33.75 pence per share, said analyst Anthony Wagg, in a note about the company.
Anglesey holds 33 percent of Canada-based Labrador Iron Mines (TSE:LIM) and it also owns 100 percent of the Parys Mountain zinc-copper-lead deposit in north Wales, where it recently began a new phase of exploration.
LIM has now become a producing mine, highlighted Wagg, and it hopes to rail more than 600,000 tonnes to the port of Sept-Iles in 2011.
This sum is less than the 850,000 tonnes that had been anticipated three months ago, but the company is confident that various problems holding back production and shipments have now been solved and that the full production target of 10,000 tonnes per day (around 2.1 to 2.4 million tonnes per year) will be reached soon after the plant opens again in the spring, highlighted Wagg in the note.
LIM is expecting to report the results of 11,500 metres of drilling in February next year, which is expected to substantially increase the resources as well as an upgrade to NI43-101 standards.
Wagg said the iron ore price for Fe 65 per cent fines is currently around US$140 per tonne but LIM would expect to receive less than this because of transport, lack of size and commission.
Edison's forecasts are based on an average iron ore price of US$95 per tonne, he said. "At this price our earnings forecasts for FY14 are C$140million and £23 million for LIM and Anglesey, respectively, or C$2.05 per share and 13.7 pence per share," he said.
Wagg said that using an iron ore price of US$95 per tonne 65 per cent Fe, LIM’s NPV (net present value) of C$788 million (at 10 per cent) gave Anglesey’s 33 per cent stake in the firm a value of £162 million, or 102 pence a share.
To this, he adds his valuation for the 100 per cent owned Parys Mountain deposit (of 38 pence a share) making a total of 140 pence per share for Anglesey.
Last Friday, Anglesey said it had begun a new phase of exploration activities at Parys Mountain - the site of an old mine on 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.
