Interim Management Statement - and Labrador Ir...

Anglesey Mining plc             LSE:AYM

17 February 2010

Interim Management Statement and Labrador Iron updates

This has been a very positive period for the company and for its 50% owned
subsidiary Labrador Iron Mines (LIM).

Most recently, on 12 February 2010, LIM signed an agreement with the Sept-Îles
Port Authority for the use of the Pointe-Noire facilities at the port to ship
LIM's iron ore products. LIM has agreed a base fee schedule with the Port
Authority regarding wharfage fees for iron ore loading for LIM's shipping
operations beginning in mid 2010. LIM is currently in negotiations with port
operators regarding rail transportation, storage, reclaim and ship-loading of
its iron ore products.

Other highlights for LIM include the decision on 12 February by the Newfoundland
government to release the first phase of the Schefferville project from the
Environmental Assessment process and the acquisition in late December of an
additional 50 million tons of historical resources.

The share prices of both Labrador Iron and of Anglesey Mining have responded
positively to the news.


Labrador Iron

During the period LIM completed a series of transactions that resulted in a
substantial increase in its mineral properties and in the historic resource base
that it now has available for future exploitation. The first of these involved
the swap of a number of mineral assets with New Millennium Capital Corporation
announced in October 2009 followed by the acquisition of a large package of
mineral properties in the Schefferville area in the Province of Quebec announced
on 17 December 2009.

LIM holds interests in Mineral Rights Licenses issued by the Department of
Natural Resources, Province of Newfoundland and Labrador, covering approximately
9,875 hectares. These Licenses are held subject to a royalty of 3% of the
selling price FOB port of iron ore produced and shipped from the properties.

In addition, LIM's wholly owned subsidiary, Schefferville Mines Inc ("SMI") now
holds interests in 218 Mining Rights issued by the Ministry of Natural
Resources, Province of Quebec, covering approximately 9,014 hectares. In
addition SMI holds an exclusive operating interest in a mining lease covering 23
parcels totalling about 2,816 hectares. These rights and interest are held
subject to a royalty of C$2 per tonne of iron ore produced from the properties.

At 31 December 2009, LIM had C$20.7 (£12.4) million in cash and cash equivalents
and is in sound financial condition to carry out its planned programs to move
its direct shipping iron ore Schefferville Project in Western Labrador into
production.

The Schefferville Projects - Western Labrador

On the James and Redmond deposits in Labrador, LIM has confirmed an NI 43-101
compliant indicated resource of 11 million tonnes. The remaining eighteen
deposits, excluding James and Redmond, have a historical resource estimated to
be approximately 134 million tons of direct shipping iron ore, based on work
carried out by the IOC prior to the closure of its Schefferville operations in
1984. The historic estimate was prepared according to the standards used by IOC
and, while still considered relevant, is not compliant with National Instrument
43-101 ("NI 43-101").

The plans for the Schefferville Projects envision the mining of the deposits in
four stages, the first stage of which will be undertaken in three phases,
comprising the deposits closest to existing infrastructure. The first phase of
Stage 1 will involve mining of the James and Redmond deposits and, the second
phase the Houston and Knob Lake deposits all in Labrador.

During the mining of the Stage 1 deposits, planning will be undertaken for the
future operation of the more distant deposits in Stages 2, 3 and 4. As currently
envisioned Stage 2 will comprise the Howse and adjacent deposits which are
relatively close to existing infrastructure. The Astray and Sawyer deposits in
Labrador (Stage 3), located approximately 50-65 km southeast of Schefferville,
do not currently have road access but can be reached by float plane or by
helicopter. The Kivivic deposit in Labrador and some of the recently acquired
deposits in Quebec are located between 40 and 70 km to the northwest of
Schefferville and may eventually become Stage 4 but will require substantial
infrastructure and building of road access.

LIM plans to bring the resources on these other deposits into a compliant status
sequentially in line with its intended phases of production, commencing with the
remaining deposits in Stage 1. LIM also intends to carry out additional
exploration including drilling and trenching on these deposits in line with
recommendations from its consultants.

The plan for the first phase of the Schefferville Projects envisages initial
production from James and Redmond, two brownfield deposits with low strip ratios
on which initial mining or development activities had been undertaken by IOC,
using contractors, followed by beneficiation using simple washing and screening.
Mining and processing operations will be conducted for eight months per year,
from April to November at an anticipated initial mining rate of 6,000 tonnes per
day.

The in situ ore is estimated to contain around 56% to 58% iron and it is
expected that the beneficiation process will enhance the product grade to around
65% iron and remove unwanted material. Two products will be produced, namely
coarse lump ore and a finer sinter feed. Approximately one-quarter of the
product will be lump ore. These products will be transported by the existing
railroad systems to the port of Sept-Îles on the St Lawrence River for onward
shipping, most likely to steel mills in Europe or Asia. The whole operation will
utilize well proven, relatively basic technology and closely reflect that
previously carried out by the Iron Ore Company of Canada in the same general
location for almost thirty years from 1954 to 1982.

Throughout the period LIM made steady progress in advancing the Schefferville
Area Labrador Project towards production with ongoing active programs, including
drilling, metallurgical testing, environmental permitting and marketing.

Assuming the relevant permits and licenses are issued during the first quarter
of calendar 2010, LIM is currently planning, subject to on-going reviews of
future iron ore prices, to commence initial site construction during the spring
of 2010. This program, if achieved, will enable LIM to install and test its
processing and transport facilities ahead of commercial production planned for
the summer of 2010.

Site program - Summer 2009

Drilling and Testwork

A program of reverse circulation drilling commenced at the beginning of June
2009 and was completed at the end of October. The deposits tested comprise the
four deposits planned to be mined in the Stage 1 plan, being James, Redmond,
Knob Lake and Houston, together with some limited drilling on the more distant
Stage 2 Howse deposit.

Metallurgical Testing

Metallurgical testwork continued during 2009 aimed at improving expected
recovery levels from all size fractions of mined material while maintaining high
iron and low impurity levels in the final product.

Testwork on the properties of the lump and fines was carried out at SGA, an
independent laboratory in Germany. The results and report from that testwork on
the James South lump ore sample indicate a high iron content of 66.98% with
favourably low content of non-ferrous metals. SGA concluded that the lump ore
represents a high quality lump ore grade which will be well accepted on the
European market. The results and report from that testwork on the James South
sinter fines indicate an iron content of 67.23% with favourably low content of
deleterious metals. SGA concluded that the high iron content and low gangue
determine the high quality of this ore, and that the fines, will be well
accepted in the European market.

Environmental and Permitting Work Advanced

On 5 November 2009, the Minister of Environment and Conservation announced that
the review of LIM's Environmental Impact Statement for the first phase of Stage
1 comprising the James and Redmond deposits had been completed. The Minister
confirmed that the EIS complies with the Environmental Protection Act and
requires no further work under the Provincial environmental assessment process.
On 12 February 2010, the Minister advised that the Government has released the
Schefferville Area Iron Ore Mine (the first phase of the Project) from
Environmental Assessment subject to terms and conditions which the LIM believes
are all achievable within the planned operating parameters .

Subsequent phases and stages of the Project will be subject to further
environmental assessments.

LIM will be required to prepare an Environmental Protection Plan and submit it
to the Minister of Environment and Conservation and receive the Minister's
approval for the Plan prior to the start of construction. The Environmental
Protection Plan will address caribou monitoring and mitigation in the vicinity
of the Project, process effluent treatment and monitoring procedures, settling
pond design and operation for storm water and pit dewatering discharges.

LIM will also be required to enter into a Memorandum of Understanding with the
Department of Environment and Conservation for the installation of a real time
water quality/quantity monitoring network, prior to the start of construction,
to monitor water quality and quantity.

LIM will submit the applications and the various required Plans for the
necessary operating permits, licenses and regulatory approvals. Assuming these
permits, licenses and approvals are issued during the first quarter of calendar
2010, it is planned to commence initial site construction during the spring of
2010, ahead of the commencement of commercial production, which, subject to
timely receipt of all permits and licences, is currently scheduled for the
middle of calendar 2010.

Project Construction

The first major construction activity will be the laying of the 2.5 mile rail
spur from the Sept-Îles Schefferville main line to the Silver Yards area where
it is planned to install the beneficiation plant. The majority of the rail
hardware is now being assembled offsite into track panels to permit speedy
installation in the spring. It is expected that this spur line will be complete
by the end of April.

Once the spur line is complete a new accommodation camp will be brought to site
and assembled. At the same time it is expected that a mining contractor will be
mobilised to site to commence mining activities including stockpiling of iron
ore ahead of the crusher pad. Tender documents have been sent to qualified
contractors for the mining and beneficiation contracts and receipt of these
tenders is awaited. A contract has been let for camp catering.

All of the major long lead items of the beneficiation plant have been ordered
and a number of these items have now been delivered. The remaining items of the
beneficiation plant are expected to be delivered by April and will be pre-
assembled prior to transport to site for final assembly. This should then permit
the beneficiation facilities to be commissioned in sufficient time to meet the
mid 2010 production schedule.

Mining Operations

Once the plant is assembled and dry run, stockpiled ore will be fed to the plant
to allow commissioning to take place. As soon as a steady state condition has
been reached saleable product of both lump ore and sinter fines will be
produced. These will then be loaded into leased rail cars that will be
transported to a port facility in Sept-Îles. This first train is expected to run
during the third quarter of 2010.

Mining and processing operations will be conducted for eight months per year,
from April to November, using conventional open pit mining methods, employing
drilling and blasting operations, at an anticipated initial rate of 6,000 tonnes
per day. The initial processing rate will be 3,000 tonnes per day over a period
of approximately 212 days per year.

Subject to timely issue of permits and approvals and completion of the work
plans, LIM expects to produce between 0.5 and 1.0 million tonnes of product
during the 2010 season to the end of November 2010. It is anticipated that
production will increase to 2.0 million tonnes for the eight month season in
2011.

Rail and Port - Transportation Infrastructure

On 12 February 2010 LIM signed an agreement with the Sept-Îles Port Authority
for the use of the Pointe-Noire facilities at the port to ship LIM's iron ore
products. LIM agreed a base fee schedule with the Port Authority regarding
wharfage fees for iron ore loading for LIM's shipping operations beginning in
mid 2010.

A deep water port, situated 650 kilometres down river from Quebec City on the
North Shore of the Gulf of St. Lawrence on the Atlantic Ocean, the Port of Sept-
Iles is a large natural harbour, more than 80 metres in depth, which is open to
navigation year round. The port is an international marine hub, at the heart of
the main maritime routes between North America, Europe and Asia, and nearly 80%
of its merchandise traffic, mostly iron ore, is destined for international
markets.

The port of Sept-Îles is the most important port for the shipment of iron ore in
North America, serving the Quebec and Labrador mining industry. Each year nearly
23 million tonnes of merchandise is handled, comprised mainly of iron ore.

LIM is currently in negotiations with port operators regarding rail
transportation, storage, reclaim and ship-loading of its iron ore products. LIM
has not yet concluded agreements with the relevant rail companies or port
operators for the transportation and handling of planned production of iron ore
in 2010. Agreements have not yet been concluded with the relevant rail companies
for the transportation and handling of the planned production of iron ore in
2010.

In October 2009, LIM signed a Rail Co-operation Agreement with New Millennium
Capital Corp. ("NML") regarding the reconstruction of the "Timmins Extension"
rail spur line which will run from the TSH Railroad main rail line near
Schefferville, a distance of approximately 2.5 miles to LIM's planned processing
centre at Silver Yards and on a further approximately 13 miles to NML's planned
processing centre at the Timmins mining area.

The Rail Co-operation Agreement provides the framework under which both LIM and
NML have agreed to co-operate in the development of the transportation
facilities for their direct shipping iron ore (DSO) projects in the
Schefferville area and which will enable each company to rebuild the necessary
rail infrastructure in their respective operating areas, including the
construction of passing tracks and sidings in common areas.

The Timmins Extension rail line will be laid on a 16 mile long existing rail bed
that extends from Mile 353 on the TSH main line to the Timmins train turning
circle. The Timmins Extension spur line, which passes from Labrador into Quebec
and back into Labrador, was previously used for iron ore mining operations. The
rails and ties were removed when the previous mining operations ceased in 1982
but the rail bed itself remains in place. Reconstruction of the Timmins
Extension will require only the laying of new rails and ties and replacement of
some ballast.

Each of LIM and NML will enter into the requisite agreements with third parties
to design and construct their respective portions of the Timmins Extension to
standards required to transport the iron ore to be extracted from their DSO
deposits. LIM intends to commence construction on the first 2.5 miles connecting
to LIM's Silver Yards planned processing area immediately upon the issue of the
necessary permits.

Under the Rail Co-operation Agreement the parties jointly agree to apply to
Government authorities for all required rights of way and/or surface rights and
for the grant to each party of the rights on a specific portion of the Timmins
Extension, along with rights of access to, construction on and use of such
specific portions as are mutually granted by one party to the other party.

The parties have  agreed to negotiate and enter into a Rail Operating Agreement
which will provide the terms of access to and use of the Timmins Extension and
the tariff to be paid by each party with respect to its use of the portion of
rail line for which the other party holds the rights of way and have also agreed
to collaborate to determine the most expedient means to  refurbish the TSH
Railway main line to standards required to carry out the transportation of
minerals extracted from the DSO deposits.

Marketing

Marketing discussions have continued with potential end users and samples have
been dispatched to a number of steel mills. These discussions have indicated an
encouraging level of interest in the LIM products based on the metallurgical
test results and analysis of the samples supplied. The indicated high iron
grades and the low level of impurities are important and should ensure that LIM
will be able to market both its lump ore and its sinter fines products.

In addition to the European interest there is significant Chinese interest in
seeking iron ore from Eastern Canada. The growing Chinese demand for iron ore,
coupled with the slower than expected development in new iron ore mines closer
to China, has begun to make Eastern Canada a viable source for this market.
Discussions continue with a number of Chinese customers and importers as well as
a number of European producers.

For 2010 LIM anticipates that it will sell all its production into the spot
market and will utilize the services of a trading company for this process. LIM
has not yet concluded any agreements for the sale of any iron ore to be produced
in 2010.

Iron Ore Price Outlook

The viability of the Schefferville Project is dependent on the sale price of
iron ore.

High demand for iron ore in recent years has been driven primarily by China and
south-east Asia. This demand effectively raised the price of iron ore "fines"
from around US$42 per tonne FOB in 2005, to about US$50 per tonne FOB in 2006,
US$55 per tonne FOB in 2007, and about US$95 per tonne FOB in 2008. Lump ore has
traditionally commanded about a 25% premium to fine ore.

During the last calendar quarter of 2008 and the first quarter of 2009,
associated with the downturn in most major economies, there was a considerable
degree of weakness in the world-wide steel industry with a number of major steel
producers announcing significant production cut-backs and redundancy programs.
This downturn was particularly severe in Europe and North America and resulted
in a decline in the spot iron ore prices from the record high prices achieved in
2008.

During the 2009 benchmark price negotiations Rio Tinto settled with a number of
Japanese and Korean steel mills at a fines benchmark price of approximately
US$65 per tonne, representing a reduction of around 33% from 2008 levels.
Negotiations with the Chinese industry represented by the China Iron & Steel
Association failed to agree on a 2009 benchmark price and China effectively
bought iron ore at the Rio Tinto benchmark price.

The future of iron ore pricing will be dependent on both the rate of recovery of
world-wide economies and the extent to which current and planned new production
capacity has been closed or deferred, and on the speed with which this closed
and deferred production can be brought back on stream.

It is reported that the major iron ore suppliers and Baosteel, representing the
Chinese industry, have now commenced negotiations over the 2010 price and that
Rio Tinto and BHP are asking for a 40% increase in the contract price while the
Chinese mills are unwilling to accept an increase of more than 30%. Industry
commentators are forecasting that the 2010 benchmark, if eventually set, will be
at a level of between 25% and 40% higher than the US$65 per tonne settled by Rio
Tinto with Japanese and Korean steel mills in 2009. This would represent a
sinter fines price of between US$80/tonne and US$90/ tonne for 63% Fe fines.

There has been some strengthening of spot iron ore prices in January 2010 though
these have weakened slightly in early February as the impact of the potential
Chinese credit restrictions are being assimilated. Nevertheless demand
particularly from China continues to grow but may be somewhat muted during the
Chinese Spring Holidays.

Quebec Iron Ore Properties

In December 2009, LIM's wholly owned subsidiary Schefferville Mines Inc ("SMI"),
acquired from Hollinger North Shore Exploration Inc. ("Hollinger"), subject to
the approval of the Government of Quebec, a 100% exclusive operating interest in
the remaining properties which are part of the original Mining Lease dated
February 9, 1953, issued to Hollinger by the Minister of Mines of the Province
of Quebec under a Special Act of the Quebec Parliament enacted in 1946 entitled
"An Act to promote mining and industrial development within New Quebec", as
amended by Quebec Mining Lease #14366 dated June 11, 1962 and registered on
April 26, 1972.

The iron ore properties are part of the former operations carried on, under a
sub-lease from Hollinger, by the Iron Ore Company of Canada in the Schefferville
region between 1954 and 1982 and comprise interests in a number of separate
deposits identified and partially developed by IOC, which collectively contain
an estimated historical resource (non NI 43-101 compliant) of approximately 50
million tons of direct shipping iron ore (DSO).

Two of these iron ore  properties, estimated to contain a combined historical
resource of about 5 million tons of iron ore, are located close to existing
infrastructure near the town of Schefferville and close to LIM's planned Stage
One DSO mining operations in Western Labrador.

Another two of the properties, estimated to contain a combined historical
resource of approximately 10 million tons of iron ore, are located approximately
20 kilometres northwest of the town of Schefferville, with existing road access,
and may form an expansion of LIM's Stage Two operations.

Two more properties, estimated to contain a historical resource of approximately
30 million and 5 million tons of iron ore, respectively, are located
approximately 35 kilometres north of LIM's Kivivic Property and could
potentially form the basis for a new Stage Four operation. These properties are
relatively remote and do not have any road access or other infrastructure.

The 1953 Hollinger Mining Lease, as amended, remains valid under its current
term to 2013 and in accordance with and subject to its provisions and the
provisions of the Act is renewable for a further twenty years to 2033.   The
lease covers areas aggregating approximately 2,800 hectares and includes
fourteen separate properties some of which contain all or parts of various known
mineral deposits. SMI has the option to take a Sublease of the properties from
Hollinger, subject to the approval of the Government of Quebec.

The Operating License and/or Sublease from Hollinger to SMI, has been granted
(subject to the approval of the Lieutenant-Governor in Council of the Province
of Quebec) subject to the reservation of a Royalty payable by SMI to Hollinger
in Trust in the amount of $2.00 (Two Canadian Dollars) per tonne of iron ore
shipped from any Hollinger property or deposit, such royalty to be payable FOB
Port of Sept- Îles, which Royalty is to be distributed by Hollinger to the
shareholders of Hollinger pursuant to pre-existing agreements.

The Operating License and/or Sublease from Hollinger has been granted subject to
all existing registered liens directly related to the Hollinger properties. SMI
has agreed to assume the obligation to settle or purchase these liabilities, and
has the right to manage and defend any claims or disputes, provided that any
payments made by SMI in settlement of such liabilities in excess of CAN $1.5
million will be deemed as advance payments and credited against the Royalty
otherwise payable to Hollinger.


In a second transaction, SMI acquired from Fonteneau Resources Inc. seventeen
separate mining claims covering a total of approximately 800 hectares in the
Province of Quebec, some of which adjoin parts of the Hollinger land package,
and are considered prospective for DSO. The properties are subject to a royalty
of $2.00 per tonne of iron ore payable FOB from the Port of Sept Îles. LIM made
advance royalty payments totalling $2 million which will be credited against any
future royalty payments on any of these properties.

SMI also entered into an Exploration and Development Agreement on ninety seven
other mining claims in Quebec, totalling approximately 2,500 hectares, which are
considered prospective for exploration for iron ore. These claims are located
approximately 100 kilometres north of Schefferville, within the Labrador Trough,
and are considered to have high regional exploration potential for iron ore.
These remote properties have no road access or other infrastructure. Limited
historical information is available on these properties.

Under the Exploration and Development Agreement SMI made a payment of $250,000
on signing, with further payments of $250,000 payable on June 30, 2010 and
$500,000 payable on each of December 31, 2010, June 30, 2011 and December 31,
2011, provided that SMI may prepay any of the above amounts at any time at its
sole discretion. SMI is obligated to maintain the properties in good standing
through December 31, 2011 and to carry out minimum programs of reconnaissance
and exploration on the properties. These claims are also subject to a royalty of
$2.00 per tonne of iron ore and 3% of any other minerals payable FOB Port.


Manganese Properties

In two separate transactions completed in the quarter ended December 2009
approximately 4,200 hectares in mineral claims were acquired, located partly in
Labrador and partly in Quebec, giving LIM a very large land package in the
vicinity of the town of Schefferville on which a number of manganese deposits
have been identified. In addition, these manganese properties also contain some
historical DSO resources.

These claims were acquired in part from MRB & Associates and in part from
Fonteneau Resources Inc. and are subject to a royalty of 3% of the FOB value of
manganese ore and $2.00 per ton of iron ore shipped from the Port of Sept-Îles.
LIM made payments totalling $200,000 for the acquisition of technical data and
to cover 2009 assessment work.

Qualified Person - Labrador Iron

Scientific and technical information disclosed herein has been prepared under
the supervision of Terence N. McKillen, P. Geo., Executive Vice President and a
Director of LIM, LIM's Qualified Person under NI 43-101.



Parys Mountain

During the period Parys Mountain was kept on care and maintenance with limited
site activity. However proposals for further drilling and related work are in
the process of formulation and there is also continuing third party interest in
the project. The group continues to view Parys Mountain as a valuable asset
which should benefit from improved prices and market outlook for copper, zinc
and lead, the main products of the projected operation.


Outlook

The immediate and medium-term outlook for the minerals industry remains somewhat
more positive than previously. There has been a strengthening in the world-wide
steel industry during the last nine months as western countries come slowly out
of recession and with continuing growth in Chinese demand. Industry analysts are
forecasting an increase in 2010 benchmark iron ore prices of between 25% and 40%
over the 2009 prices. Nevertheless it is by no means certain that there will not
be some set-backs in the overall recovery process.

The directors' believe that the long-term fundamentals of the iron ore market
will remain generally strong for most of the expected life of the LIM's planned
operations. This view is based upon several factors including an expected
continuation of Chinese, Korean and Japanese demand. Iron ore prices are
expected to become more robust once global demand is confirmed and returns to
more stable levels. For 2010 and beyond the future of iron ore pricing will be
dependent on the rate of recovery of the world economy. We remain of the view
that for 2010, the first year of planned commercial production from the
Schefferville Projects, and beyond, iron ore prices will continue to increase,
before stabilizing around 2012 to 2013.

The encouraging progress being made in Labrador and the recognition by the
market of the extent of the cash flows which should ensue from the commencement
of iron ore mining, should result in the group growing its assets and share
price over the next two years at least. Following the recent
release of phase 1 environmental assessments, we can now see a clear route
through to production, one which we have been planning for the past two years.

We expect Labrador to be very active in the short term and we plan to allocate
more resources to try to ensure that Parys Mountain is also contributing to
shareholder value.


About Anglesey Mining

Anglesey Mining plc is a UK based company listed on the London Stock Exchange
with a 50% interest in a 150 million ton iron ore project in Labrador, Canada,
which is under active development towards mining production in 2010. The company
also holds the Parys Mountain base metals project with a historical resource of
7.7 million tonnes at 9.3% combined copper, lead and zinc in Anglesey, UK.

Further information on Labrador Iron Mines is available at
www.labradorironmines.ca.

For further information:
Bill Hooley, Chief Executive            +(44) 1492 541981
Ian Cuthbertson, Finance Director   +(44) 1248 361333