29 June 2007                                                                                                LSE: AYM

Preliminary Announcement of results 2007

Chairman’s statement

We have made excellent progress on at Parys Mountain and Labrador during this last year with the main challenge facing us being obtaining the major finance required to start development of both projects.

At the Labrador project an initial feasibility study was completed and Anglesey earned an 80% joint venture interest in the properties.

At Parys Mountain a new JORC resource was published for the White Rock Zone and a recently completed scoping study on White Rock has demonstrated its viability.

Both these projects are distinguished by their short time to production, a feature which should enable us to take advantage of the present levels of metal prices. There is a strong consensus amongst analysts that these historically high levels of metal prices will continue for the foreseeable future.

The group reported a profit for the year of £6.76 million, which included a reversal of a £7.2 million impairment provision made in previous years, compared to a loss last year of £517,405.

Labrador

Our iron ore properties in eastern Labrador, formerly part of the Iron Ore Company of Canada, have been the subject of intensive work during the year. This culminated in the production of an initial feasibility study which demonstrated the viability of the project. The study looked at all the major technical, commercial and social functions including resources, mining, metallurgy, infrastructure, transportation, environmental issues and First Nation affairs. As a consequence of this study and of the summer 2006 exploration programme, and by committing to put the properties into production, the company earned a 80% undivided interest in the properties. 

The respected Canadian consultant SNC-Lavalin was retained to review the development options for our Labrador properties. Its report was carried out against the Canadian National Instrument 43-101 standard and has not yet been finalised, but SNC generally conclude that the historical resources on which the initial feasibility study was based can be brought to a modern compliant standard with a relatively limited confirmatory drilling programme.

There is considerable worldwide interest in iron ore deposits of the size and style of our Schefferville project. Where these can be brought to production rapidly and with relatively low capital cost, both of which are the case at Schefferville, then those companies that control these assets have risen significantly on their own stock exchanges in recent months.

We are considering a number of options for financing the development of the Labrador project, including a separate flotation of these Canadian operations.

Parys Mountain

As indicated previously we have adopted a new development plan for Parys Mountain in a three phase approach. The major aspects of these phases are:

Phase I – the White Rock Mine, based on near surface resources accessed and mined from a spiral decline over a period of five years at 150,000 tonnes per annum.

Phase II – re-commissioning the Morris Shaft, then mining the Engine zones and deeper White Rock at 350,000 tonnes per annum.

Phase III – extending the mine to the east into the Garth Daniel and deep Engine zone areas at the same or an increased production rate.

We believe this staged approach significantly reduces the time, capital and risk required to bring the Parys Mountain mine into production.

Micon International Co Limited was commissioned to carry out a Scoping Study for Phase I of this plan and this study has recently been received. This Study was based on the resource estimates for White Rock made by Micon and published in late 2006. The study suggests that a viable operation could be conducted on the White Rock alone and would create a positive cashflow, including paying the costs of a 500 tpd processing plant and driving the decline access to 170 metres depth.

It is the company’s intention to follow this plan and to use the cashflow generated to continue development to the bottom of the Morris Shaft. Subsequently the shaft, head-frame and winder would be refurbished and the treatment capacity of the mill upgraded. This would then enable production from the larger Engine Zone to merge seamlessly with the end of White Rock production.

Because of the work already carried out, and the existing valid planning permissions, we believe that, subject to financing, the White Rock Mine could be in production in less than 18 months from commencement of the decline development.

Financial results

With metal prices at their current and forecast levels we believe the impairment provisions against the carrying value of the Parys Mountain property made in previous years are no longer appropriate and, in accordance with the relevant accounting standards, have been reversed in this year’s financial statements, resulting in a credit to the Profit and Loss account of £7,200,000. Our administrative expenses this year were £388,894 compared with £242,243 last year, the increase being due to higher levels of activity and additions to the payroll. Overall we are reporting a profit this year of £6,762,751 compared with a loss last year of £517,405. The company has no revenues from the operation of its properties.

Outlook

With the good progress made this year, our plan is to move forward towards production from both our properties and we are continuing our efforts to achieve this goal. Financing conditions are not as easy as current metal prices might lead one to expect and we have been frustrated and delayed in a number of initiatives. Nevertheless we are confident that our projects are unique in their political stability and ability to generate early cashflows and that they distinguish us from the many development stage companies in the market today.

We will continue to work towards our goal of the early development of base metals at Parys Mountain and iron ore in Labrador. Once these targets are achieved we anticipate better and wider recognition of the value of the company.
 

John F. Kearney  

Chairman