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.
Ambrian sees promise in Anglesey Mining's Parys Mountain copper project
Anglesey Mining’s (LON:AYM) Parys mountain project holds promise in a segment of the stock market where there are very few other promising copper development stories, according to Ambrian.
Of late, the firm’s 33% stake in Toronto listed Labrador Iron Mines (TSE:LIM) has taken precedence for investors as the Shefferville mines project in Canada moved into the staged production phase.
But this morning it announced that drilling is now underway at the wholly-owned Parys Mountain project on the island of Anglesey in North Wales.
With this programme, Anglesey 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.
“Parys Mountain may come to have increasing influence over the company’s share price going forwards,” Ambrian analyst Nick Mellor said in a note to clients.
That said, the analyst still believes the Labrador Iron Mines’ production performance is likely to be the key driver to influence the stock’s valuation.
Production and shipping will resume in April following the annual winter downtime in northern Canada.
“Market sentiment will be focused on any news around Labrador Iron Mines securing longer-term access to the seaborne markets for its iron ore (where currently the company is selling its ore on to the Iron Ore Company of Canada) and its general ability to grow production volumes in line with guidance (hinged around sustaining recovery improvements at its processing operation),” Mellor added.
Ambrian has a ‘buy’ recommendation on the stock with a 81p price target, which is based on the broker’s risked NAV for the LIM stake.
Given that Anglesey shares currently trade at just 28.5p there is clearly plenty of upside, according to Ambrian’s valuation, for the LIM stake alone regardless of the value that could be added by the potential development of Parys Mountain.
The Welsh copper-zinc-lead project has over 7 million tonnes, at over 9% combined metal, in historic resources.
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 to 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.
