AYM.GB Anglesey Mining PLC

 
TIDMAYM 
 
Trading Symbol 
 
                                                                       AIM: AYM 
 
12th January 2023 
 
                              Anglesey Mining plc 
 
                         ("Anglesey" or "the Company") 
 
           Anglesey acquires a further 29.8% of Grängesberg Iron AB 
 
Anglesey Mining plc (AIM:AYM), the UK minerals development company, is pleased 
to announce it has entered into an agreement to acquire an additional 29.8% of 
Grängesberg Iron AB ("GIAB"), the entity that owns the Grängesberg Iron Ore 
Project in Sweden, taking Anglesey's stake to 49.75%. 
 
  * Anglesey Mining plc has agreed with Roslagen Resources AB ("Roslagen") to 
    purchase Roslagen's 29.8% stake in GIAB, taking Anglesey's ownership level 
    to 49.75%, and the assignment to Anglesey of 40% of outstanding 
    subordinated debt owed to Roslagen by GIAB with a nominal value of £ 
    335,000, for a total consideration of £525,000, to be satisfied as follows: 
      + A cash payment on completion of SEK 1,090,000 (c.£87,000), funded from 
        the Company's existing resources; and, 
      + The issue to Roslagen of 14,544,827 new ordinary shares of Anglesey 
        Mining at a price of 3.0 pence per share (the "Consideration Shares"), 
        to be held in escrow for twelve months from the date of issue. A 
        further announcement will be made upon the issue of the Consideration 
        Shares. 
  * At the closing of the transaction, Roslagen will hold 4.9% of the expanded 
    capital of Anglesey and will also continue to hold approximately SEK 
    6,280,000 (£500,000) in subordinated debt due from GIAB 
  * Anglesey has a Right of First Refusal on the remaining 50.25% of GIAB 
  * Andreas Simoncic, a director and shareholder of Roslagen will remain on the 
    Board of GIAB 
  * The Updated PFS for Grängesberg completed in July 2022 highlighted the 
    robust economics of the asset with a post-tax NPV8 of US$688m, at an iron 
    ore price of US$120/tonne, 62% Fe, CFR China benchmark, and FOB costs of 
    US$53/t to the ice-free port of Oxelösund, Sweden 
  * Previously, revenue was also generated from the sale of apatite 
    concentrates (17-19% P) produced from the tailings stream. While the PFS 
    indicates potential apatite production of 210ktpa, no sales have yet been 
    included in the financial evaluation. This product also contains elevated 
    rare earth content 
  * The Swedish Mining Inspectorate granted Grängesberg Iron AB a 25-year 
    mining concession for the iron ore mine in 2013 
 
Jo Battershill, Chief Executive of Anglesey Mining, commented: "We are very 
excited to agree this transaction with Roslagen, increasing Anglesey's holding 
in Grängesberg. We are also very pleased to retain the services of Andreas 
Simoncic on the Board of GIAB and welcome Roslagen's ongoing involvement as an 
Anglesey shareholder. Andreas' long history with the project will be an 
important component in moving Grängesberg forward." 
 
"We continue to believe the Grängesberg project has the potential to be 
restarted as one of Europe's largest individual producers of iron ore 
concentrates. When combined with the high-grade nature of the concentrate and 
proximity to European steel mills, the asset clearly demonstrates highly 
strategic positioning." 
 
"As we have previously communicated, the opportunity for Anglesey Mining is now 
to advance the project through to a Financial Investment Decision. This could 
be completed along with securing a strategic investor, offtake partner, 
separate listing, or a combination of these options. However, we recognise that 
there is still a lot of work to complete at Grängesberg, including updating 
both the resource and reserve models and undertaking environmental assessment 
studies as preliminary steps to preparing a Feasibility Study." 
 
Additional Information on GIAB 
 
As at 31 December 2021, GIAB had gross assets of SEK 90,091,613 (£7.2m). GIAB 
reported a loss before tax of SEK (6,001,706) (£0.48m) for the year ended 31 
December 2021. 
 
 
 
 
 
Background on Grängesberg Iron AB 
 
Grängesberg Iron AB ("GIAB") is a private Swedish company that was founded in 
2007 by Roslagen with the target of re-opening the historic iron ore mine in 
Grängesberg. 
 
In May 2014, as part of a financial and capital restructuring process in GIAB, 
Anglesey Mining entered into agreements giving it the right to acquire a 
controlling interest in the Grängesberg Iron Ore Project. The agreements 
included a payment of US$145,000 for a direct 6% interest in GIAB. 
 
At the same time, Eurang Limited, a UK private company, agreed to invest $1.75 
million, of which $1.25 million was invested in GIAB, for new shares 
representing a 51% shareholding interest in GIAB. The additional $500,000 was 
used to cover transaction costs, expenses and certain outstanding liabilities. 
Roslagen held the remaining shares. Anglesey also entered into shareholder and 
cooperation agreements such that Anglesey holds management control and 
operatorship of GIAB with three out of five directors to the board of GIAB 
including the Chair. Through this structure, Anglesey Mining retains a Right of 
First Refusal over the GIAB stake held by Eurang. 
 
Anglesey Mining's stake in GIAB was subsequently increased to the current 19.9% 
through working capital injections in the company since 2014, while Roslagen's 
shareholding was diluted. 
 
GIAB Balance Sheet 
 
As part of the 2014 agreements and reorganisation, an outstanding loan in GIAB 
in the principal amount of US$3.5 million due to KII Holdings Limited, a 
Cypriot subsidiary company to a substantial Greek shipping group, was also 
renegotiated. At the end of December 2022, the liabilities on the GIAB balance 
sheet included outstanding debt of SEK 93,023,816 (£7.4m), which included SEK 
79,675,695 (£6.3m) payable to KII and SEK 10,448,605 (£0.8m) to Roslagen, prior 
to the assignment of SEK 4,200,000 to Anglesey as part of the proposed 
transaction. 
 
The debt is non-recourse to Anglesey Mining and all creditors have the right at 
maturity, or in connection with an IPO, to convert all or part of the loan into 
shares in GIAB at: 
 
(i)            valuation of GIAB in IPO; or, 
 
(ii)           valuation to be agreed or determined by independent investment 
bank 
 
The term of this funding has been extended since the 2014 reorganisation and 
discussions are currently ongoing with respect to a further extension beyond 
the current expiry at the end of January, 2023. 
 
 
 
 
Grängesberg Iron Ore Project 
 
The Grängesberg Iron ore project, owned by GIAB, is located 10 km to the 
southwest of Ludvika in Dalarna County, central Sweden, within the Bergslagen 
mining district. The project is situated approximately 200 km northwest from 
Stockholm, the capital of Sweden. 
 
The Grängesberg Mine produced iron ore from the late sixteenth century until 
1990 when the mine closed due to the prevailing iron ore price. Grängesberg was 
one of Sweden's most important iron ore mines, next only to Kiruna and 
Malmberget and was producing approximately 4.0Mtpa in the latter years of 
operations. 
 
At the time of closure significant amounts of iron ore were reported to still 
remain in the mine, which have been estimated by GIAB to NI43-101 standards. 
GIAB intend to re-open the iron ore mine for future production in line with the 
Pre-Feasibility Study Update completed in July 2022. 
 
Resources and Reserves 
 
The resource and reserve estimates for Grängesberg are provided below. 
 
                  Resource      Tonnes       Fe       P         Contained Fe 
 
                  Category       (Mt)       (%)      (%)            (Mt) 
 
Grängesberg      Indicated      115.2       40.2     0.78           46.3 
 
                  Inferred       33.1       45.1     0.91           15.0 
 
                   Total        148.3       41.3     0.81           61.3 
 
Resources were last estimated in 2014 to a cut-off grade of 20% Fe and with a 
minimum mining width of 10m applied. 
 
                  Reserve       Tonnes       Fe      Contained Fe 
 
                  Category       (Mt)       (%)          (Mt) 
 
Grängesberg       Probable       82.4       37.2         30.7 
 
                   Total         82.4       37.2         30.7 
 
Reserves were calculated to a cut-off grade 25% Fe and with a minimum mining 
width of 15m applied. The estimate also assumed 85% mining recovery and 15% 
mining dilution with a long-term pellet price of 180 US¢/dmtu Fe. 
 
Key Project Metrics 
 
The key project metrics from the July 2022 Pre-Feasibility Study Update are 
shown in the tables below. 
 
Key Metric                                Unit    2022 PFS Update 
 
Ore to Mill                                Mt           82.3 
 
Life of Mine                             Years          16.0 
 
Contained Fe                               Mt           30.6 
 
Recovery                                   %             85 
 
Recovered Fe                               Mt           26.0 
 
Outgoing Concentrate                       Mt           37.2 
 
Concentrate Grade                         % Fe           70 
 
Average annual Concentrate Output          Mt           2.3 
 
Cash cost*                             US$/t Conc      53.60 
 
All-in Sustaining Cost**               US$/t Conc      57.80 
 
Pre-production capital                    US$m          399 
 
Post-tax NPV8%                             %            688 
 
Post-tax Internal Rate of Return           %             26 
 
Project payback                          Years          3.6 
 
Average annual Post-tax Operating         US$m          130 
Cashflow *** 
 
* Cash costs are inclusive of mining costs, processing costs, site G&A, 
transportation charges to port and royalties 
 
** All-in Sustaining Cost includes cash costs plus sustaining capital and 
closure cost 
 

*** Post-tax Operating Cashflow based on iron ore price forecast of US$120/t 
China CFR 62% Fe benchmark 
 
 
 
 
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. 
 
 
Upon completion of the transaction Anglesey will hold an almost 50% interest in 
the Grangesberg Iron project in Sweden, together with management rights and a 
right of first refusal to increase its interest to 100%.  Anglesey also holds 
12% 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: +1 416 362 6686 
 
Davy 
 
Nominated Adviser & Joint Corporate 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 
 
Scout Advisory Limited 
 
Investor Relations Consultant 
 
Sean Wade - Tel: +44 (0) 7464 609025 
 
LEI: 213800X8BO8EK2B4HQ71 
 
 
 
END 
 
 

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