Anglesey Mining Sees China Recovery as Key
by John Williams
Anglesey Mining (LSE:AYM), which sees economic recovery in China as key to a broader recovery in world metal prices, has announced a small loss for the financial year.
This compares with a profit of £10.2 million in 2008, mainly attributable to proceeds of the flotation of further shares in Canadian miner, Labrador Iron Mines (Holdings) Limited (TSX: LIM) in which Anglesey has a 50 per cent holding.
The company is cautiously optimistic, according to Chairman John Kearney, with total assets of just under £28 million and total liabilities of less than 10 per cent of total assets.
Results for 2009 were significantly impacted by the global economic downturn, which has affected all companies in the world mining sector. It seems the low point of the decline in commodity prices was around the end of 2008 and since then there has been a slow if unspectacular recovery.
The company expects the Western Labrador direct shipping Iron Ore project to start full commercial production in 2010. Meanwhile, the planned sale of Parys Mountain Mine fell through when negotiations with Western Metals Limited of Perth, Australia (now renamed Indago Resources Limited)ended in October 2008.
It seems the two parties could not agree on terms, a situation exacerbated by the significant volatility induced by declining global commodity prices.
The Parys Mountain site has now been placed in a "care and maintenance" mode so that costs can be kept down to a minimum. Anglesey Mining does have the benefit of all the data gathered during the Western Metals due diligence process, as well as a geological report carried out during 2008.
This information could be very useful in any potential future explorations at the Parys Mountain location, south of Amlwch.
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