08 Sep Financial Report and Corporate Update
7 September 2022 AIM: AYM
Anglesey Mining plc
(“Anglesey” or “the Company”)
Anglesey Mining Financial Results and Corporate Update
Anglesey Mining plc, the UK minerals development company, is pleased to announce the release of its full year financial results for the year ending 31 March 2022, and provide an update for investors on current activities at the Company’s Parys Mountain Cu-Zn-Pb-Ag-Au and Grängesberg iron ore projects.
Financial and Operating Results
- Comprehensive loss of £2.8m in the financial year ended 31 March 2022 compared to the prior year comprehensive profit of £3.7m, with the variance primarily attributable to the mark-to-market valuation of the Company’s 12% holding in Labrador Iron Mine Holdings Limited
- Successful fund raising of £0.86m subsequent to the end of the financial period
- Completion of key operating milestones during the period, including the completion of the first drilling programme at Parys Mountain for 12-years and the commencement of the Pre-Feasibility Study on the Grängesberg Iron Ore Project in Sweden
- During the current financial year, the Company will continue to advance the technical aspects of the Parys Mountain studies and permitting activities. At the Grängesberg Iron Ore Project, the Company will be completing the next round of technical work on the resource and reserve estimates to enable the Bankable Feasibility Study to start
Jo Battershill, the CEO & Managing Director of Anglesey Mining, commented: “The activities of the last 12 months continue to demonstrate that Anglesey Mining has two potentially long life, highly cash generative mine developments. At Parys Mountain, the first drilling in over a decade was successful in infill drilling areas of White Rock that were previously in the Inferred category and will provide a bulk sample to be used in the upcoming pre-concentration and flotation testwork. The initial design work for the Tailings Management Facility has also commenced along with many aspects of the environmental baseline studies, which we will continue to advance over the coming months. The Board continues to believe permitting of the project will help to close the valuation gap between our share price and the potential NPV of Parys Mountain.
Recent work on evaluating the prospectivity of the large Northern Copper Zone has confirmed the significant upside of that mineralised system. Based on the current mine plan, the Northern Copper Zone doesn’t come into the production schedule until year 5, subsequently we believe there is an opportunity to extend both the deeper high-grade zones and the shallower zones of wide mineralisation – some of these zones are over 60m thick and represent genuine bulk mining opportunities.
I am very confident about the prospects of a mine development opportunity at Parys Mountain. The project would generate significant employment on Anglesey and the greater region for a generation. We believe that the suite of commodities at Parys Mountain are critical to the supply chain for the global push of decarbonisation and electrification of the economy and will remain in strong demand over the coming decades.
The release of the Grängesberg PFS Update results subsequent to the end of the period were confirmation of just how significant that project could be, both for Anglesey shareholders and the broader EU steel manufacturers after the Russian invasion of Ukraine. Prior to the Ukraine invasion, the EU imported almost 60%, or 40Mt, of its annual iron ore supply from these two countries. Subsequently, a secure source of up to 2.5Mtpa of 70% Fe concentrate has a highly strategic value. We will look to consolidate and advance the Grängesberg project over the course of the current year.
Our unwavering commitment to the sustainable development of our resource projects continues. Where possible, we will always use the appropriate environmentally friendly solutions. We also continue to believe that the development of our projects will benefit the environment via shortening of global supply chains with the commensurate reductions in carbon emissions – particularly the high-grade iron ore concentrate that will be produced from the Grängesberg iron ore project in Sweden.”
Annual Report 2022 and Notice of AGM
The Company is pleased to publish its annual financial report for the year ended 31 March 2022, which has also been posted to shareholders. The annual report is available to view at www.angleseymining.co.uk and extracts from the report are presented below. The annual report also includes a Notice of AGM. The AGM will be held at the offices of DLA Piper, 160 Aldersgate Street London EC1A 4HT on 27 October 2022 at 11.00 am and the Notice of AGM contains details of all resolutions to be proposed.
The full annual financial report complete with details of the AGM can be viewed or downloaded in pdf format HERE.
Extracts from the Annual Report 2022
Chairman’s Statement
To Anglesey Shareholders
The past year has been a period of global uncertainty, volatility and subsequent conflict. While the problems associated with the COVID-19 pandemic reduced significantly, they were replaced with new challenges created by the Ukraine conflict and the subsequent impacts on global security, rampant inflation from energy scarcity and fears of global food shortages.
Nevertheless, despite these conditions, we saw significant progress at both our Parys Mountain copper/zinc/lead project and our iron ore projects in Sweden and Canada, while on the corporate side a new Chief Executive, Jo Battershill, was appointed and the board of directors was strengthened. Additionally, during the past year over £1.5 million was successfully raised in new financings in October 2021 and May 2022 attracting new institutional investor support and shortly after the year end we moved our listing from the Main Market of the London Stock Exchange to AIM.
Review of activities
A very active year at Parys Mountain saw the first drilling programme since 2012, the commencement of environmental studies, the appointment of Knight Piésold to undertake both the design stage for the tailings management system together with the geotechnical assessment of the underground development, and engagement with local planning and regulatory authorities and local councils. Meanwhile in Sweden, a Pre-Feasibility Study Update for the Grängesberg Iron Ore Project was completed with very encouraging results, while in Canada Labrador Iron Mines continued to advance its Houston direct shipping iron ore project toward production. Further details on these activities may be found in the Strategic Report.
At Parys Mountain, the drilling programme had the aim of improving confidence in the White Rock and Engine Zone resources and providing samples for both confirmatory metallurgical test work and geotechnical domain modelling. The infill programme confirmed an extensive mineralised system in the near surface White Rock zone and provided very valuable information that will now feed into the next stages of our development studies. Our confidence in the White Rock and Engine Zones continues to increase.
Additionally at Parys Mountain, where Anglesey Mining holds planning permissions for the development of the mine, processing plant and tailings storage facility, first steps were taken to secure the required operating permits to commence mining and processing of ore. We are engaged in the review process including discussions with the North Wales Minerals and Waste Planning Service and local councils. Initial environmental monitoring and ecological surveys have also begun.
At Grängesberg, a very positive update of the PFS indicates production of 2.3 – 2.5Mtpa of iron ore concentrate grading 70% Fe that generates strong economic returns, including a NPV8% of US$688 million post-tax, and confirming that the Grängesberg iron ore mine has the potential to be restarted as one of Europe’s largest individual producers of high-grade iron ore concentrates.
The Ukraine conflict has highlighted the strategic positioning of Grängesberg. Prior to the conflict, Russia and Ukraine supplied over 20Mt of iron ore into the European steel market. With the future uncertainty around this supply, a long-term source of iron ore could be highly sought after by European and Middle Eastern steel producers. Grängesberg, with the high-grade nature of its concentrate, existing infrastructure and favourable location in southern Sweden in proximity to European steel mills, represents highly strategic positioning.
Board of directors strengthened
After an extensive search, two senior minerals industry executives, Andrew King and Namrata Verma, were appointed to the board as independent directors to help guide the management team in the development of the Parys Mountain and Grangesberg Iron projects. They both join Anglesey with the highest of reputations in their own particular sectors and their combined and extensive experience in the financing sector of the worldwide minerals industry will be critical in the successful funding of both projects. The company is already benefiting from their input and advice.
Sudden passing of Bill Hooley,
Deputy Chairman
It was with deep sadness that we reported the sudden death of our esteemed colleague, Bill Hooley, in early June 2022. Bill had served as CEO of Anglesey Mining from 2006 to 2021 and directed the completion of various resource upgrades for Parys Mountain, the 2017 Scoping Study and the QME optimisation work, which lead to the successful production of the 2021 PEA. Bill was also a Director and Deputy Chairman of Anglesey’s associate company, Labrador Iron Mines, serving as President and COO from 2007 to 2011, during which time he directed the initial development and successful construction, into commercial production, of LIM’s James iron ore mine in Labrador, Canada. Bill was appointed non-executive Deputy Chairman of Anglesey Mining in August 2021 and was continuing to provide his advice and experience until his sudden death. We will miss Bill’s wise counsel, humour and friendship.
Corporate activity
In October 2021, £768,230 was successfully raised via the issuance of 22,595,000 shares at a price of 3.4p per share. On 8 April 2022, following approval from shareholders at a General Meeting, Anglesey Mining moved from the Main Market of the LSE to the Alternative Investment Market (AIM). The AIM listing will offer greater flexibility regarding corporate transactions, enabling the more rapid and cost-effective agreement and execution of transactions and financings. It will also provide improved visibility for Anglesey and enhanced liquidity for investors.
In May 2022, following the appointment of WH Ireland Limited and Canaccord Genuity Limited as joint brokers, a Placing and Subscription was successfully completed, raising gross proceeds of £864,416, with certain institutional and other investors, including the Chairman and the Chief Executive, at a price of 3.4 pence per share.
As a further step to strengthen our financial position we entered into a new Investor Agreement with Juno Limited, the company’s largest shareholder. In the new Investor Agreement, Juno agreed to participate in any future equity financing, with the subscription price to be satisfied by the conversion of debt, and the company agreed to pay Juno in cash ten percent of the net proceeds of the financing in further reduction of debt. The net effect of the new agreement with the May placing was that the debt due to Juno was reduced by £305,499.
Metal prices
Metals are critical for climate transition and the clean energy technologies needed to meet the world’s climate action goals will require much more metal. As a board, we remain very confident that the outlook for minerals, particularly for the copper and zinc minerals at Parys Mountain, and for iron ore where we hold significant investments, is very encouraging.
Environmental and social focus
The purpose and objective of Anglesey Mining is to create value for shareholders in an environmentally, socially, and ethically responsible manner which is also to the benefit of all stakeholders. Our principal current activity is to achieve this by developing, building and operating a producing mine at Parys Mountain. We place a high priority on environmental, social and governance (ESG) matters, and we are committed to being a responsible mining company, which maintains mutually beneficial long-term relationships with key stakeholders and the local community. Readers are invited to refer to the report on Corporate Governance.
Outlook
The results from the 2021 PEA demonstrate that a significant copper-zinc-lead mine can be developed at Parys Mountain with very positive financial returns. The current year is seeing momentum increased with respect to the required elements of a project development. Permitting activities are ramping up, including environmental and ecological studies, tailings management design work is being undertaken, along with confirmatory metallurgical test work and underground geotechnical domain modelling. Further infill drilling – specifically within the Northern Copper Zone is planned.
These activities will enable us to move the project to a full committed decision to proceed to production. As has been said before, these steps do take some time to reach fruition and are key requirements to securing the necessary finance to move the project towards production.
At Grängesberg, the Pre-Feasibility Study has provided a series of recommendations to progress the project through to the commencement of a Feasibility Study and at a general corporate level we will continue to review other opportunities within the global metals and mining sector.
In closing I wish to recognise the dedication and enthusiasm of our small management team, led by Jo Battershill, for the significant progress made over the past year, and thank our expanded and reinvigorated board of directors for their leadership, as well as consultants and advisors, for their contribution, and, of course, our shareholders for their continued support.
John F. Kearney
Chairman of the Board
7 September 2022
About Anglesey Mining plc
Anglesey Mining is traded on the AIM market of the London Stock Exchange and currently has 280,675,721 ordinary shares on issue.
Anglesey is developing its 100% owned Parys Mountain Cu-Zn-Pb-Ag-Au deposit in North Wales, UK with a 2020 reported resource of 5.2 million tonnes at 4.3% combined base metals in the Indicated category and 11.7 million tonnes at 2.8% combined base metals in the Inferred category.
Anglesey holds an almost 20% interest in the Grangesberg Iron project in Sweden, together with management rights and a right of first refusal to increase its interest to 70%. Anglesey also holds 11% of Labrador Iron Mines Holdings Limited, which through its 52% owned subsidiaries, is engaged in the exploration and development of direct shipping iron ore deposits in Labrador and Quebec.
For further information, please contact:
Anglesey Mining plc
Jo Battershill, Chief Executive – Tel: +44 (0)7540 366000
John Kearney, Chairman – Tel: +1 647 728 4106
Davy
Nominated Adviser & Joint Company Broker
Brian Garrahy / Lauren O’Sullivan – Tel: +353 1 679 6363
WH Ireland
Joint Corporate Broker
Katy Mitchell / Harry Ansell – Tel: +44 (0) 207 220 1666
Canaccord Genuity Limited
Joint Company Broker
James Asensio / Harry Rees – Tel: +44 (0) 20 7523 8000
Scout Advisory Limited
Investor Relations Consultant
Sean Wade – Tel: +44 (0) 7464 609025
LEI: 213800X8BO8EK2B4HQ71
A full pdf copy of the Anglesey Mining plc Annual Report 2022 can be viewed or downloaded HERE.