Anglesey increases stake in Grängesberg to 49.75%

Anglesey Mining plc has increased its stake from 19.95% to 49.75% in the owners of the Grängesberg iron ore project in Sweden.

GRÄNGESBERG

Private Swedish firm Grängesberg Iron AB (GIAB), founded by Roslagen Resources AB, owns the project which lies 10km to the southwest of Ludvika in Dalarna County, central Sweden, within the Bergslagen mining district.

The project is situated approximately 200km northwest from Stockholm.

TERMS

Anglesey Mining has agreed to buy Roslagen’s 29.8% stake in GIAB, and 40% of outstanding subordinated debt owed to Roslagen by GIAB with a nominal value of £335,000, for a total £525,000.

Anglesey Mining will pay Roslagen cash on completion of SEK1,090,000 (£87,000) from the company’s existing resources.

It will additionally issue to Roslagen 14,544,827 Anglesey Mining new ordinary shares each at a price of 3.0 pence, to be held in escrow for twelve months from the date of issue.

At the closing of the transaction, Roslagen will hold 4.9% of the expanded capital of Anglesey Mining and continue to hold approximately SEK 6,280,000 (£500,000) in subordinated debt due from GIAB.

JOINT VENTURE

The joint venture also includes Eurang Ltd, which in 2014 agreed to invest in the project $1.75 million, of which $1.25m was invested in GIAB for new shares representing a 51% shareholding in GIAB.

Anglesey Mining holds management control and operatorship of GIAB with three out of five directors to the board of GIAB including the chairman.

Through this structure, Anglesey Mining retains a right of first refusal over Eurang’s stake in GIAB.

Following the transaction, Andreas Simoncic, a director and shareholder of Roslagen will remain on the GIAB board.

FINAL INVESTMENT DECISION

Anglesey Mining chief executive Jo Batttershill said that Grängesberg had 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.”

Mr Battershill added that work still to complete included revising resource and reserve models and environmental assessment studies leading to a feasibility study.

In 2013, the Swedish Mining Inspectorate granted Grängesberg Iron AB a 25-year mining concession for the iron ore mine.