Acquisition of controlling interest in Grangesberg Iron

Anglesey Mining plc 29 May 2014 LSE:AYM Anglesey to acquire controlling interest in Grangesberg Iron Anglesey Mining plc ("Anglesey") is pleased to report that it has entered intoagreements giving it the right to acquire a controlling interest in theGrangesberg Iron project in Sweden. GrangesbergIron Ore Mine: The Grangesberg iron ore mine is situated in the mineral-rich Bergslagendistrict of central Swedenabout 200 kilometres north-west of Stockholm. Untilits closure in 1989 due to prevailing market conditions, the Grangesberg minewas the third largest iron ore mine in Sweden, next only to the Kiruna andMalmberget mines in the north of Sweden, with in excess of 150 million tonnesof iron ore mined down to around 500 metres deep. Prior indications are that at least 115 million tonnes of iron ore containingaround 40% iron remain for exploitation at Grängesberg. The homogenous iron orebody in Grängesberg is of significant size and of the Kiruna geological type,making it well suited for cost-effective production of attractive iron oreproducts. The Grangesberg mine site benefits from excellent infrastructure and is locatedadjacent to the Swedish national rail system which will permit easy access toice free port of Oxelosund on the Baltic Sea on the south east coast of Sweden,the location of SSAB Sweden's largest steel plant. Significant underground andsurface infrastructure remains intact at Grangesberg, including a fullyoperational railway line from mine to port. It is expected that following the normal environmental permitting processes andengineering design and financing, a conventional underground bulk miningoperation followed by processing using standard technology can produce some 2.0to 2.5 million tonnes per year of saleable iron ore concentrate for theEuropean, Middle East and Asian steel markets. Agreements: In a series of agreements Anglesey has purchased for US$145,000 a direct 6%interest in Grangesberg Iron AB ("GIAB"), a private Swedish company that wasfounded in 2007 with the target of re-opening the historic iron ore mine inGrangesberg and which, in conjunction with the Anglesey investment and withAnglesey assistance, has recently completed a financial and capitalrestructuring. GIAB holds a 25 year exploitation permit covering the previouslymined Grangesberg underground mining operations granted by the Swedish MiningInspectorate in May 2013. At the same time Anglesey has negotiated a 12 month evaluation option toacquire 51% of the enlarged share capital of GIAB for the issue of new ordinaryshares of Anglesey. Anglesey has also entered into shareholder and cooperationagreements such that during the term of the option Anglesey holds managementcontrol and operatorship of GIAB and will appoint three out of five directorsto the board of GIAB including the Chairman. The remaining 43% of GIAB is held by Roslagen Resources AB, a Swedish privatecompany, which has led the re-development of the Grangesberg iron project since2007. Roslagen will appoint two directors to the board of GIAB and provideexperienced local executive management. As part of the agreements and reorganisation an outstanding loan in GIAB in theprincipal amount of US$3.5 million due to KII Holdings Limited, a Cypriotcompany has been renegotiated and is now repayable by the end of 2016. At the same time, Eurang Limited, a UK private company, has agreed to invest$1.75 million, of which $1.25 million has been invested in GIAB, for new sharesrepresenting the 51% shareholding interest in GIAB. This has been carried outthrough a new wholly owned special purpose Swedish company, Eurmag AB overwhich, during the term of the option, Anglesey will hold management and controlrights. The additional $500,000 will be used to cover transaction costs andexpenses and certain outstanding liabilities. Option to acquire 51% of Grangesberg Upon the exercise of the option, which will be entirely at Anglesey'sdiscretion, Anglesey will acquire all of the shares of Eurang Limited by theissue of new shares of Anglesey to the value of $1.75 million, to be priced atthe average of the Anglesey share price at the date of option (3.375p) and the20 day average share price prior to date of exercise, (but at no lower than3.375p), and thereby acquire direct ownership and control of the 51%shareholding in GIAB, and thus increase Anglesey's direct interest in GIAB to57%. GIAB will have debt outstanding of about US$ 5 million, (about $4 millionincluding accrued interest payable to KII and about US$1 million ofsubordinated debt payable on a deferred basis to Roslagen), while EurangLimited will have debt of approximately US$4.5 million. During the term of the option Anglesey will hold management control over Eurmagwith the ability to exercise voting rights on the shares of GIAB. If followingits evaluation and assessment Anglesey does not exercise its option it willrelinquish its board seats and management direction and control of GIAB at theend of the 12 month option period but will continue to hold 6% of the shares ofGIAB. Grangesberg Development plan: "Grängesberg is a mine with a rich historical heritage and an exciting futurepotential" said Bill Hooley, Anglesey Chief Executive. "Anglesey believes thatthere is an opportunity to re-open the Grangesberg mine to provide a localsource of high quality ironore, well known, to theEuropean steel industry.Theagreements announced today give Anglesey the opportunity to evaluateGrangesberg,both technicallyat the minelevel in the Grangesberg area andcommerciallythroughout the Swedishand European steel industry, with the rightto acquire control of the Grangesbergproject on attractive terms." The new capital injection of US$1.25 million in GIAB will be used underAnglesey's direction to advance the Grangesberg project towards production andfor working capital. Anglesey intends to carry out an evaluation of the Grangesberg projectincluding a technical and economic assessment to determine the viability ofputting the Grangesberg iron ore mine back into commercial production under theeconomic conditions to be expected during the proposed mine life. Immediate planned work will include a programme of geo-mechanics and monitoringat the mine site as a prelude to obtaining permission to dewater the mine. Inthe same time-frame Anglesey plans to produce a new compliant ore resourceestimate and to progress work on the pre-feasibility study on reopening theGrangesberg mine. In parallel with these activities the ongoing background environmental studiesand permit applications will be progressed. Anglesey will also carry outdetailed marketing studies on both the Swedish and the greater European marketsfor Grangesberg iron ore products. In the subsequent periods, following the exercise of the option and subject tosuccessful financing, it is expected that a definitive feasibility study willbe undertaken, including mine definition drilling, process test-work anddetailed engineering design and costing. About Anglesey Mining plc Anglesey previously led the redevelopment of the Schefferville Area iron oredeposits in western Labrador and north-eastern Quebec and sponsored the initialpublic offering of Labrador Iron Mines Holdings Limited on the Toronto StockExchange. Sharing some common directors and senior management, Angleseycontinues to hold 15.3% of the shares of Labrador Iron Mines Holdings Limitedwhich over the three years 2011 to 2013 produced about 3.5 million tonnes ofiron ore from its direct shipping iron ore deposits, all of which was sold inthe China spot market. 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 JORCCode-compliant resource of 2.1mt at 6.9% combined base metals in the indicatedcategory and 4.1mt at 5.0% combined in the inferred category was published inNovember 2012. A detailed review of the resource base for the entire site hasrecently been commenced by Micon International. The company continues to reviewthe future demand predictions for base metal concentrates particularly zincahead of any decision to move to development and production. For further information, please contact: Bill Hooley, Chief Executive +44 (0)1492 541981; Danesh Varma, Finance Director +44 (0)207 6539881;

Samantha Harrison: RFC Ambrian +44 (0)20 3440 6800;