Proactive Investors reported that Anglesey Mining described the half year, to end of September, as 1 of mixed fortunes. The group's 19.7% owned iron mining associate Labrador Iron Mines improved its operations substantially with a big increase in output.
Anglesey Mining said that however, weak iron prices in August and September severely restricted revenue.
In total 1.6 million tonnes of iron ore was mined by LIM and 1.1 million dry tonnes were sold in 7 shipments. It plans to produce 2 million tonnes next year.
AYM reported a loss of EUR 7.4 million for the half year as a result of its shareholding in LIM.
Looking ahead, the London listed company said that the medium term outlook for the group remains dependent upon metal prices.
It said that after something of a recovery since September iron prices must remain close to current levels so that LIM can look forward to a positive restart in April 2013 when the weather conditions in Labrador allow operations to resume.
AYM added that as LIM is heavily geared to the iron price, any reasonable move upwards will have a very positive effect on profitability.
Additionally, the prices of other base metals will also prove significant in the future as AYM aims to move forward its own project, the Parys Mountain mine in North Wales.
AYM said that zinc prices have been fairly robust and show no signs of retreating. Moreover, the metal is forecast to be in short supply in Europe in the next 2 to 3 years.
At the end of September AYM had EUR 1.9 million of cash and following its subscription in LIM's recent CAD 30 million share placing it had EUR 800,000 in cash.
Analysts at RFC Ambrian said that as a result of recent dilution Anglesey now holds less than the 19.9% significant interest threshold, which means it can freely trade LIM shares should it require funds.
The broker said that "Overall, we are pleased with operational performance and management's execution of operations at full scale within the mine, processing plant, railway and port facilities."
