Anglesey Mining (LON:AYM), the London stock exchange listed junior has recently received a substantial cash boost of £2.7m to its coffers through the sale of shares in Labrador Iron Mines (TSX:LIM). Anglesey Mining, following the sale it now has an undiluted holding of 41% in the Toronto listed company. [1]
The current market capitalisation which stands at around £53m is made up almost entirely from the value of its investment in the Labrador project which is focused on development of direct iron ore deposits. [2] The Labrador project will receive a major boost as it is due to move into production from its James deposit this summer. Beaufort have rated Anglesey Mining based on their LIM investment as a buy with a target price of 54p. [3]
In raising the cash Bill Hooley the Anglesey Mining chief executive, commented,
"We are very pleased that the underwriters have exercised their option and this transaction has been completed. Anglesey now has sufficient funds for its immediate requirements and is looking at using the opportunity to demonstrate shareholder value at Parys Mountain, and to investigate and progress new activities. There are a number of possible projects that have been under active review recently and we are pleased to have the funding to properly evaluate and progress these projects where appropriate."
Parys Mountain is Anglesey Mining’s other main project which is located near Amlwch on the Island of Anglesey, and is one of the oldest mines in the UK. In the 18th century Parys Mountain was even regarded as the most productive copper mine in the world. Parys Mountain has a historical resource in excess of seven million tonnes of copper, lead and zinc. [4]
Having been invested in the company for over 11 years, the current share price heights are a just reward for patience and may appreciate further as the Labrador project moves into its next phase, however with regard to adding value through the Parys Mountain asset, I am a bit more sceptical at this stage.
Disclosure of Interest: The Author has shares in Anglesey Mining plc
