5 July 2006                                                                            LSE: AYM 

Preliminary statement of results 2006

Highlights

·         Two financings completed raising £1,624,000

·         Option secured to earn a 70% interest in the Labrador Iron Mines project in Canada

·         Continued drilling success at Parys Mountain including delineation of the new Engine zone deposit in the Garth Daniel area

·         Appointment of Bill Hooley as Executive Director and Roger Turner as Non-Executive Director

Commenting on the results, John F. Kearney, chairman of Anglesey Mining, said:

"We have seen significant developments for the company over the past year and are very pleased with our progress. The drilling programme at Parys Mountain has continued to produce excellent results and we are confident that further drilling will lead to an increase in the resources. The Labrador Iron project is an exciting new initiative and the dramatic improvement in commodity prices over the past year has placed Anglesey in a strong position to become a metal producer on two continents. We will work hard to achieve this within a short time frame.”

For further information please contact:

Ian Cuthbertson, Finance Director                         + (44) 1248 361333

Bill Hooley, Executive Director                               + (44) 1492 541981

John F. Kearney, Chairman                                   + (1) 416 362 6686

Cathy Malins / Annabel Leather,

Parkgreen Communications                                   + (44) 20 7493 3713

Chairman’s statement

The last year has been a most exciting one for our company and I am pleased to be able to report to shareholders that the improvements outlined last year have continued apace.

Despite some corrections in recent weeks, metal prices have increased very significantly over the past year and there is now a consensus that the prices for the metals we plan to produce are likely to stabilise at far higher levels than those experienced over the past ten years. Higher prices will, of course, ensure that the Parys Mountain project is profitable and financeable.

Of particular importance this year was our success in securing an option to earn a 70% interest in an advanced iron-ore project in eastern Canada. Given the continuing strength of iron-ore prices in recent negotiations this project is likely to be highly valuable to the company in the coming years.

At Parys Mountain we have been very encouraged by the success of our drilling programme and the delineation of the new Engine zone deposits in the Garth Daniel area. This new area has the potential to be extended both eastwards and westwards and should add significantly to the Parys Mountain resource base.

Further, we have been fortunate to make two noteworthy additions to our board. Roger Turner (non-executive) and Bill Hooley (executive), both experienced mine developers, have joined us and I believe that they will make very important contributions to the rapid development of Parys Mountain and the Labrador Iron project, as well as to the identification of potential new projects.

Financing

Two fundraisings have been effected during the year. The first (reported in last year’s chairman’s statement) raised £464,000 in May 2005 and the second raised £1,160,000 in February 2006. These funds have been and will continue to be applied to exploration at Parys Mountain and at the Labrador Iron project, and additionally will be used to progress studies aimed at financing both projects.

Parys Mountain

During the year the company completed 2,225 metres of diamond core drilling in four holes. Three of these were located in an area centred approximately 700 metres north-east of the Morris shaft, and the fourth was drilled, without a significant result, some 400 metres south of the Morris shaft. We have already reported on the considerable success achieved with the first three holes and on the delineation of a new zone in the Garth Daniel area. These three holes intersected three mineralised horizons: from the highest, the Carreg-y-Doll through the North Central to the lowest horizon, the Engine zone. These included intersections of 2.5 metres at 40% combined copper, lead and zinc and 5.5 metres at 22% combined Cu-Pb-Zn. The mineralisation in the Engine zone was not part of any previous resource estimates on the site. We believe that the Garth Daniel area has a potential strike length exceeding 1.5km and has the possibility of adding substantially to the resource base. We are currently drilling a further hole in this area and on the basis of the results from this new hole we will be able plan our ongoing drill programme for Garth Daniel.

In addition to the programme at Garth Daniel, we have commenced a close-spaced drill programme on the White Rock zone near to the Morris shaft. This drilling will be used for mine planning purposes, particularly for the earliest stopes in the planned underground mining programme.

In addition to the physical work on site, we have begun the task of creating an electronic geological model based on the prior and present geological data which, when completed, will be used for detailed mine planning and will be helpful to the search for further resources and for long term mine planning.  

The company is continuing the review of the feasibility study for the project. This review is based on the original 1991 Kilborn Study but will be brought up to date using the revised geological model, additional metallurgical test-work, a revised mine plan and updated costings. It is expected that this update will be completed during 2006 and will provide the basis for financing the project through to production. Subject to financing, it is expected that the mine could be in production in less than two years of commencement of construction.

The strategic location of Parys Mountain on the doorway of the major European smelters is of major benefit. With the recent upsurge in metal prices, especially zinc and copper, there has been widespread interest expressed in the project from mining and associated industry support companies. A number of detailed site visits have been carried out and we believe that it is likely that this interest could result in the provision of at least part of the finance required to develop the property.

Labrador Iron

In October 2005 the company obtained an option to earn a 70% interest in the Labrador Iron Mines (LIM) project in the province of Newfoundland and Labrador in Canada. As a matter of record I have declared that in a personal capacity I was partly responsible for assembling the portfolio of leases and that I hold an interest in part of the remaining 30% of the joint venture.

LIM is based in the vicinity of the original Iron Ore Company of Canada (IOCC) mines in the Schefferville region of Labrador. The leases subject to the joint venture were largely drilled by IOCC before 1984, resulting in an estimate of the resource remaining to be at least 100 million tonnes of haematite ore averaging around 55% iron. In addition to these drilled resources, the majority of the original infrastructure including a 575 kilometre railroad to the port of Sept-Iles remains in place and functioning.

The plan is to develop LIM as a relatively low tonnage operation of 2 to 5 million tonnes per annum with an equally low capital cost. Unlike IOCC, it is intended to wash and upgrade the run-of-mine product in order to sell both high value lump ore as well as sinter fines into the iron-ore market. We believe that this project can be developed quickly and at low cost, in contrast to other companies proposing larger but far more complex and expensive projects.

Studies on the various options for development have begun and will continue with a substantial confirmatory and exploration drilling programme during the summer of 2006. It is expected to have the results of a pre-feasibility study to hand by September, and if these are as positive as we expect then we will move straight to a full feasibility study to be completed during 2007 with the intention of completing finance by the end of 2007 and obtaining first production by 2008.

We believe this is a truly exciting prospect, selling sought-after material into a buoyant market and, assuming that the pre-feasibility study confirms our initial review, we expect it to considerably enhance the value of the company within a short period of time.

Financial Results

This year the accounts have been prepared under the International Financial Reporting Standards now being adopted for all listed companies, and this has led to the restatement throughout the accounts of the figures for 2005. For the year ended 31 March 2006 there was a loss of £517,405 compared to a loss of £186,769 in the previous year. An impairment provision of £194,065, an increase in share based compensation payments of £36,815 and generally higher levels of activity resulting in higher expenses are the reasons for the increase in the loss. The company has no revenue from the operation of its properties. Following the placings made during the year, the cash position at 31 March 2006 has improved to £1,201,381 from £44,070 last year.

Outlook

The continued long term improvement in commodity prices has now placed your company in a position where it is poised to become a metals producer on two continents within a short time frame. This is a significant turnaround from the difficult position that was faced just three years ago.

We intend to continue to explore and develop our two major projects at the same time as carrying out the necessary studies to bring them rapidly to production. Additionally we will continue to review other prospective properties that could give us the opportunity to rapidly develop other operating mines.

John F. Kearney   

Chairman

Consolidated income statement

for the year ended 31 March 2006

Consolidated statement of recognised income and expense

for the year ended 31 March 2006

Consolidated balance sheet

Statements of changes in equity

for the year ended 31 March 2006