Anglesey Mining PLC (AIM:AYM) told investors that part-owned associate Labrador Iron Mines has received a US$4mln strategic investment for NYSE-listed Scully Royalty, with the funding tipped to unlock value in the Houston project.
Scully is providing US$3mln in an equity component plus US$1mln through a convertible loan facility.
The proceeds are expected to provide working capital whilst Labrador Iron Mines advances a number of project initiatives including the negotiation of an off-take deal (with construction finance and product sales components), continuing metallurgical test work, and advancing commercial negotiations with contractors, vendors, and logistics providers.
Altogether it is expected to culminate in a preliminary feasibility study by 2023.
“The inflow of funds is a key development to help unlock the significant value of the Houston project, which has obvious benefits to Anglesey shareholders,” said Anglesey Mining chief executive Jo Battershill.
“Scully is a very well credentialled strategic investor with extensive iron ore mining experience and relationships within the Labrador Trough.”
Battershill added: “The iron ore assets within Anglesey have significant value and present strategic opportunities in geopolitically safe and mining friendly jurisdictions.
“The Grängesberg Iron Ore Project in Sweden, in which we hold a 20% direct interest and 50% interest via a right of first refusal, is one of the largest iron ore development opportunities within the EU and could potentially supply up to 2.5Mtpa of high-grade iron ore concentrate to European and Middle Eastern steel mills for at least 16-yrs.”
Anglesey’s shareholding in Labrador will equate to 11% of the Canadian company as a result of the Scully investment, reduced from 19%.