Anglesey Mining Still in Talks to Sell Its Parys Mountain Site to Australian Firm As It Develops Canadian Project ; Your Money
By: iStockAnalyst Wednesday, September 03, 2008 5:53 PM
(Source: Western Mail)By Aled Blake
ANGLESEY Mining yesterday said it had still not come to a formal agreement over the sale of its Parys Mountain site to an Australian firm.
An offer to acquire the Parys Mountain mine in Anglesey was made by Western Metals of Perth in April.
Since then Western has been carrying out due diligence and negotiations on a definitive agreement between the companies have continued.
In a statement released yesterday, Anglesey said that no formal agreement has been signed, while shareholder approval will also be required for the transaction.
The company said that activities at its major project, the development of iron ore mining in Labrador, Canada, near the town of Schefferville, have been "significantly increased" since April.
Based on the company's current plans, this project is fully funded through to first production in 2009 and development activities are proceeding "rapidly in all areas".
In an interim statement to the Stock Exchange, Anglesey said: "The team required to drive the project forward has been recruited and during the summer has carried out a number of major tasks.
"On July 24, the company and the Innu Nation of Labrador announced that they had signed an Impact Benefit Agreement (IBA) committing to an ongoing relationship between the Innu Nation and Labrador Iron Mines.
"The agreement was signed following the earlier execution of a memorandum of understanding between the parties.
"The IBA is a life of mine agreement that establishes the processes and sharing of benefits that will ensure an ongoing positive relationship between Labrador Iron Mines and the Innu Nation.
In return for their consent for and support of the Labrador Iron Mines project, the Innu Nation and their members will benefit through training, employment, business opportunities and financial participation in the project.
"This is a significant step in the development of the project which would not have been possible without this agreement."
The company said work on the Parys Mountain site has been cut back during the period of Western Metal's due diligence.
It added: "Reductions in the price of zinc have adversely affected the economics of the company's proposed White Rock development.
"In July 2008 the company was granted a consent to discharge water from its Morris Shaft, an essential step in the re-starting of mining operations.
"The iron ore market is robust and is forecast to remain strong. The group believes that it is well placed to take advantage of this strength as it brings the Labrador iron project into production in 2009.
"The outlook for base metals is less certain, the price of zinc having fallen significantly since its 2007 peak thereby affecting the group's own plans for the next stage of Parys Mountain.
"In contrast, copper prices have remained historically high, and more than half of the value of the Parys Mountain deposits is in copper, generally at deeper levels than the zinc, which is found near-surface particularly in the White Rock area."
(c) 2008 Western Mail. Provided by ProQuest LLC. All rights Reserved.
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