LIM announces equity financing
Anglesey Mining plc LSE:AYM
17 January 2013
LIM Announces Equity Financing
Anglesey Mining's 19.7% owned associate Labrador Iron Mines Holdings Limited
(TSX:LIM) announces that it has filed a preliminary short form prospectus in
connection with an overnight marketed public offering (the "Offering") of
common shares in LIM ( "Common Shares"). The Offering will be conducted through
a syndicate of underwriters led by Canaccord Genuity Corp. (the
"Underwriters"). LIM will also grant the Underwriters an over-allotment option
to purchase up to that number of additional common shares (the "Over-Allotment
Common Shares") equal to 15% of the Common Shares sold pursuant to the
Offering, exercisable at any time up to 30 days after and including the closing
of the Offering at a price equal to the offering price of the Common Shares.
The Offering will be priced in the context of the market with final terms of
the Offering to be determined at the time of pricing.
LIM intends to use the net proceeds from the Offering to fund mining,
processing and inventory costs, including payments to the LIM's mining
contractors, and transportation costs in connection with the resumption of
production operations and to supplement working capital and general and
administrative costs for the remaining winter season.
For the 2012 operating season LIM met its reduced 2012 production target of 1.7
million wet tonnes of iron ore production and sold a total of 1.56 million dry
tonnes of iron ore products. LIM sold two cape-size shipments in October for
approximately 322,000 dry tonnes, the sales proceeds of one of which were
received in October and one final shipment of lump ore of approximately 103,000
tonnes, the sales proceeds of which remained receivable as at December 31, 2012
and were received in January 2013.
LIM expects to report revenue from iron ore sales of approximately $23 million
for the quarter ended December 31, 2012, and approximately $94 million for the
nine month period ended December 31, 2012. As at December 31, 2012, LIM had
cash of approximately $10 million and expects to be in a positive working
capital position as at that date.
For 2013 and following years, operations will be focused on LIM's Stage 1
deposits including the James Mine (currently operating) and six smaller
satellite deposits and some historical stockpiles located within a 15 km radius
of the James Mine and the Silver Yards processing plants. LIM is currently
targeting production for the 2013 season at a similar level as in 2012 of
between 1.7 million and 2 million wet tonnes of iron ore produced.
In resuming its planned seasonal mining operations in the spring of 2013, for
its 2014 fiscal year, LIM will incur regular operating, mining and
transportation expenses for the months of April and May, 2013 before receipt of
payment for its first sales of iron ore anticipated in June 2013 and will
require working capital of approximately $40 million to fund these operating
and re-start expenses.
LIM has been actively pursuing working capital financing arrangements for the
seasonal start-up of operations in the first quarter of its 2014 fiscal year
(April to June 2013). Such financings may include an operating line of credit
or product off-take arrangements or a combination of these alternatives.
However, while a number of institutions have provided term sheets for
financings in the range of $20 to $40 million, subject to various conditions,
and undertaken due diligence, at the present time there can be no assurance
that such financing can be fully completed by the beginning of the 2013
operating season. Accordingly, LIM is pursuing the Offering to ensure no delay
in the orderly seasonal resumption of operations in April 2013.
LIM's preliminary operating results for the quarter ended December 31, 2012 and
for the nine months ended December 31, 2012 are outlined in the table below.
Quarter Ended December Nine Months Ended December
31, 2012 31, 2012
(all tonnes are dry Tonnes Grade % Fe Tonnes Grade (% Fe)
metric tonnes)
Total Ore Mined 198,467 59.9% 1,828,398 61.3%
Direct Rail Ore portion 159,637 60.9% 1,212,870 62.3%
Waste Mined 224,548 -- 3,127,158 --
Ore Processed and 183,635 59.8% 954,813 58.2%
Screened
Lump Ore Produced 18,082 64.6% 98,693 61.2%
Sinter Fines Produced 149,698 61.4% 693,173 61.4%
Total Product Railed 254,136 61.8% 1,492,960 62.3%
Tonnes Product Sold 425,472 62.0% 1,559,620 62.5%
Port Product Inventory 111,009 60.9% 111,009 60.9%
Site Product Inventory 3,551 58.4% 3,551 58.4%
Site Run-of-Mine Ore 446,975 56.2% 446,975 56.2%
inventory
The Offering is being made pursuant to a short form prospectus to be filed in
each of the provinces of Canada other than Quebec. The Offered Securities will
not be registered under the U.S. Securities Act of 1933, as amended, and may
not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements.
This press release does not constitute an offer of securities for sale in the
United States. The securities being offered have not been, nor will be,
registered under the United States Securities Act of 1933, as amended, and may
not be offered or sold within the United States absent U.S. registration or an
applicable exemption from U.S. registration requirements.
For further information, please visit LIM's website at
www.labradorironmines.ca
About Anglesey Mining plc
Anglesey holds 19.7% of Toronto-listed Labrador Iron Mines Holdings Limited
(TSX:LIM) which is producing high grade hematite from its James pit, one of
LIM's twenty direct shipping iron ore deposits in western Labrador and
north-eastern Quebec.
Anglesey is also carrying out exploration and development work at its 100%
owned Parys Mountain zinc-copper-lead deposit in North Wales, UK where a JORC
Code-compliant resource of 2.1mt at 6.9% combined base metals in the indicated
category and 4.1mt at 5.0% combined in the inferred category was published in
November 2012.
For further information, please contact:
Bill Hooley, Chief Executive +44 (0)1492 541981;
Ian Cuthbertson, Finance Director +44 (0)1248 361333;
Samantha Harrison / Klara Kaczmarek: RFC Ambrian +44 (0)20 3440 6800;
Emily Fenton / Jos Simson: Tavistock Communications +44 (0)20 7920 3155