ANGLESEY MINING PLC: LIM arrangement with Tata Steel Minerals Canada
ANGLESEY MINING PLC: LIM arrangement with Tata Steel Minerals Canada Anglesey Mining plc
12 March 2013
Labrador Iron Mines Announces Strategic Relationship with Tata Steel Minerals Canada
Anglesey Mining's associate Labrador Iron Mines Holdings Limited (TSX:LIM) reports that it has entered into a framework arrangement with Tata Steel Minerals Canada ("Tata"), a subsidiary of Tata Steel Limited, to establish a strategic relationship between LIM and Tata whereby the two companies have agreed to co-operate with each other in various aspects of their iron ore operations in the Labrador Trough and enter into definitive agreements to formali se this arrangement in due course.
The key points of this arrangement are:
* LIM and Tata will work together to ensure the successful joint development
of rail and port infrastructure facilities at Schefferville and Sept-Iles. * Tata will purchase an initial 51% joint venture interest in LIM's Howse deposit for a $30 million cash payment to LIM. * LIM will acquire the right to develop the Tata Timmins 4 deposit at a rate of $2 per tonne .
LIM and Tata operate adjacent DSO iron ore projects in the Province of Newfoundland and Labrador and in the Province of Quebec, and intend to utilize the same rail and port infrastructure.
The strategic relationship will include multi-part co-operation agreements in areas of logistics , property rationali sation , ancillary support and potential off-take arrangements. As part of the logistics agreements, the companies will formali se arrangements for development of the rebuilt rail line that will pass through LIM's Silver Yards facilities from Tata's new Timmins Area processing plant to the TSH main rail line.
The companies also plan to continue to co-operate on the upgrade of the TSH rail line that connects Silver Yards/Timmins spur line to the QNS&L line and on other areas of future logistics operations such as camp accommodations, the sharing of ore cars, flat bed freight cars and rail car repair facilities.
The co-operation agreement will also include participation in developing infrastructure at the Port of Sept-Îles with the objective of establishing access and terminal facilities for both companies to the Port's new deep sea multi-user dock.
As part of the strategic relationship, LIM and Tata have agreed to enter into a transaction for the development of LIM's Howse deposit and Tata's Timmins 4 deposit. LIM will sell a 51% interest in its Howse deposit to Tata. The Howse deposit, located about 25 kilometres north of LIM's James Mine and Silver Yards processing plant, has a historical resource of 28 million tonnes and is part of LIM's proposed Stage 3 project, currently expected to be developed about 2020. It is expected that significant cost savings and synergies can be achieved by processing Howse ore through Tata's adjacent Timmins Area plant.
As part of the proposed cooperation arrangements, and fulfillment of certain conditions precedent, LIM will receive a cash injection of $30 million. LIM may also acquire up to 100% interest in Tata's "Timmins 4" deposit, located about 2 kilometres from Howse, at a consideration of $3 million payable from sales of Timmins 4 ore at $2 per tonne. In future, Tata has an option to inject up to $25 million into the Howse project to further increase its interest in the Howse deposit to 70%.
In a separate release Mr H.M. Nerurkar, MD of Tata Steel Limited noted "The proposed arrangement with LIM is expected to enhance the raw material security for the group and streamline the logistics of the DSO Project"
LIM's Chairman and Chief Executive Officer John Kearney said "This is a transformational arrangement for LIM that has the potential to provide significant cost synergies, position LIM to address key logistics and infrastructure issues and expedite the development of LIM's Howse deposit. The $30 million in cash proceeds from the proposed arrangements will be used by LIM to fund its working capital, capital expenditure and exploration requirements for the 2013 operating season".
About Anglesey Mining plc
Anglesey currently holds 19,289,100 shares in LIM which comprise 15.3% of LIM's outstanding share capital. Toronto-listed Labrador Iron Mines Holdings Limited is producing high grade hematite from its James pit, one of LIM's twenty direct shipping iron ore deposits in western Labrador and north-eastern Quebec.
Anglesey is also carrying out exploration and development work at its 100% owned Parys Mountain zinc-copper-lead deposit in North Wales, UK where a JORC Code-compliant resource of 2.1mt at 6.9% combined base metals in the indicated category and 4.1mt at 5.0% combined in the inferred category was published in November 2012.
For further information, please contact:
Bill Hooley, Chief Executive +44 (0)1492 541981;
Ian Cuthbertson, Finance Director +44 (0)1248 361333;
Samantha Harrison / Klara Kaczmarek: RFC Ambrian +44 (0)20 3440 6800;
Emily Fenton / Jos Simson: Tavistock Communications +44 (0)20 7920 3155
-0- Mar/12/2013 11:13 GMT