Project and Production Update (9560Y)

TIDMANGM

RNS Number : 9560Y

Angel Mining PLC

08 March 2012

ANGEL MINING PLC

("Angel Mining" or the "Company")

   AIM:   ANGM

Project and Production Update

The Company has continued to make good progress at the Nalunaq Gold Mine towards reaching its target production range of 1,500 to 2,000 ounces of gold dore per month. The mine has been successfully producing high grade ore and the process plant has been recovering approximately 85% of gold from the feed material.

There were 2 gold pours in January totalling 32.9kg (approx. 952 ounces of saleable gold) and the latest pour on 28 February was 16.945kg (approx. 490 ounces of saleable gold).

Production in February was less than expected due to the failure of a critical pump in the process plant which put the plant out of commission while replacement parts were sourced, delivered to Greenland and installed. In total the failure resulted in 10 days of downtime. The failure of the pump was progressive and was due to the abrasive nature of the host rock. The rate of wear was much faster than had been anticipated and, in consequence, the company has now purchased a standby pump and increased its inventory of spares.

March production was expected to exceed the lower level of the target range of 1,500 ounces. However, unfortunately the company suffered a further setback on the 6(th) of March when the main generator lost a piston, causing terminal damage to the engine block. The main generator, in addition to providing power for the mine and support facilities, also powers the processing plant including the front end crushing circuit. Currently, Nalunaq is using the standby generator, which is able to support the mining operation and the process plant but it is not powerful enough to drive the front end crushing circuit. As a result, there will be further disruption to the gold output during March, although it is estimated that there is sufficient ore already part processed to produce approximately 15kg of dore by mid March.

A replacement engine is being supplied by the Caterpillar dealer in Denmark and it should be on site by 23(rd) March. It is likely to take 2 or 3 days to commission the engine once it is delivered, so gold processing should recommence a few days before month end. Mining will continue during this period and the ore will be stockpiled until there is sufficient power to run the crushing circuit. In addition, the company will also commission the final process plant upgrade during this period which should increase the recovery rate at the plant to its final target level of approximately 90%.

During the time when the full capabilities of the mill will be unavailable, the management team is doing what it can to reduce short term costs and is rescheduling periods of leave for employees who are not needed during the maintenance and upgrade period.

The shutdown will have an inevitable impact on working capital and liquidity and the Company is working with its operational and financial creditors to ensure that it has competent payment agreements which can be upheld. The Company also has the continued support of its other financial creditors who are working constructively with the company to allow it to reach its target production levels and meet its financial commitments as they fall due.

Nicholas Hall, CEO, commented: "I have been delighted with the way in which our team at Nalunaq has been strengthened in the last year and, having just been on site, I can confirm that spirits and confidence are high. The setback in February was very frustrating but it demonstrates how very important it is, when working in Greenland, to make sure that we are vigilant about maintenance and overhaul of all of our equipment. We cannot simply drive to the supplier and pick up the right part if it is not available in our own stores. However, we have the high grade ore and we have a plant that works and a competent team, so our next news release should be much more encouraging for shareholders. To put this latest setback into perspective, we are likely to lose three weeks of ore crushing but otherwise the mining operations are running well and building towards our target"

Enquiries:

 
 Angel Mining plc 
  Nicholas Hall, Chief Executive Officer    07931 709 053 
  Kevin McNair, Chief Financial Officer      07900 690 908

Enquiries:

 
 Angel Mining plc 
  Nicholas Hall, Chief Executive 
   Officer                             07931 709 053 
  Kevin McNair, Chief Financial 
   Officer                              07900 690 908 
 Fox-Davies Capital (Broker) 
  Daniel Fox-Davies 
  Simon Leathers                        0203 463 5010 
 Fox-Davies (Nominated Adviser) 
  Simon Leathers                        0203 463 5010 
 Bishopsgate Communications Limited 
  Nick Rome/Shabnam Bashir              0207 562 3350

This information is provided by RNS

The company news service from the London Stock Exchange

END

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