Black Angel Mine

RNS Number:7550Q
Angus & Ross PLC
26 March 2008

AIM:   AGU.L

26 March 2008


                                ANGUS & ROSS PLC

                            ("A&R" or "the Company")

                     UPDATE ON RESTART OF BLACK ANGEL MINE

           WITH PRODUCTION OF ZINC, LEAD AND SILVER EXPECTED IN 2008

A&R announces that it is making considerable progress towards the planned
re-opening of the Black Angel mine in Greenland and the board is confident that
it will be able to commence production during 2008.  A&R has been encouraged by
the response it has received in discussions with various potential sources of
development capital and other finance.

Mining Licence application at an advanced stage

A&R submitted its Mining Licence application in February to the Greenland Bureau
of Mines and Petroleum ("BMP").  The BMP has confirmed that its review of the
Bankable Feasibility Study ("BFS") and of the mining licence application is
complete and that its report has been forwarded to the Joint Committee, for its
approval.  A&R expects the mining licence to be issued in June.

Bankable Feasibility Study

The BFS, prepared by Wardell Armstrong International, was based entirely on the
removal of pillars from the Angel and Cover zones and covers the first 4 years
of operations.  The project will achieve full production during year 1 and is
then forecast to produce 230,000 tonnes of high grade ore in each subsequent
year and over the 4 years, to generate earnings, before interest and tax, of $97
million, free cash flow of $26 million and deliver an IRR of 43% at a discount
rate of 10%.

Enhanced Management Development Plan - Phase 1

The A&R management team recognises that other available mineable resources (not
to proven resource standard) were not included in the BFS.  These include the
Nunngarut deposit, with an indicated resource of 196,000 tonnes (grading 9%
zinc, 3.4% lead and 31grams per tonne of silver) which is currently accessible
for mining, and the Deep Ice and other zones with combined indicated resources
of 697,000 tonnes which will be accessible via the cable car. Mining the
Nunngarut deposit in parallel with the reserves identified in the BFS has
enabled A&R to develop an Enhanced Management Development Plan for Phase 1
which:

*      accelerates cash flow in the early stages of the project
*      improves the overall project economics
*      extends the time frame to at least 5 years before the Phase 2
       development commences to exploit the remaining indicated and inferred 
       resource base of 2.2 million tonnes.

The BFS mine plan is based on selective mining of Black Angel pillars for the
first 18 months, at a target grade of 16% zinc, 6% lead and 25 grams of silver
per tonne but subsequent production will need to be upgraded.  The BFS assumes
the use of dense media separation for ore concentration, but recent optical ore
sorting tests have proved highly successful; this technology is now preferred
and has been incorporated into the Enhanced Management Development Plan, as it
is cheaper in terms of both capital and operating costs and is not water based.

The Enhanced Management Development Plan is capable of generating $45.2 million
of operating cash flow each year from year 2 onwards, based on an annual
production rate of 230,000 tonnes of high grade ore and applying metal prices of
$2,500 per tonne of zinc and $3,000 per tonne of lead.

Status of Equipment

The cable car, needed to access the Black Angel, has been purchased from
Garaventa in Switzerland and most parts are currently on site at Maarmorilik.
The ground terminal is in the course of construction and work has commenced on
the upper terminal.  It is intended that the facility will be fully operational
before October 2008.  Contractors have been identified for most of the site
construction work and the principal items of mobile mining equipment are
currently being sourced in South Africa.

Recruitment

The mine manager designate is currently in South Africa sourcing equipment and
recruiting the initial team of experienced miners.  The Company intends to
develop training programmes, to enable it progressively to recruit and train
Greenlanders.

It is hoped that the senior management team will be strengthened imminently by
the appointment of a Director of Mining and the recruitment of a geologist.

Exploration Potential

An independent review of the geological data, by Aurum (Mineral Exploration
Consultants), indicates the trending of mineralisation around the Black Angel
Mine and supports the view that there are likely to be additional substantial
resources, yet to be fully quantified.  On commencement of production at Black
Angel, it is the intention to implement an active exploration programme to
extend the resources available to mine and so extend the life of the mine beyond
the minimum of 5 years implicit in the Enhanced Management Development Plan.

Strategy

A&R management believes the development of Phase 1 and access to cash flow will
allow it to pursue an aggressive exploration programme and so unlock the
significant base metal potential surrounding the Black Angel Mine.  This has
already been evident in the early exploration successes in the South Lakes
Glacier and ARK deposits that have been discovered to date.  With this strategy,
A&R hopes to be able to confirm the Black Angel as the basis for a new zinc
province in Greenland.

Funding

A&R Management has assessed the restart under the Enhanced Management
Development Plan and now believes the project requires $39 million of capital
expenditure and a further $11 million of mine development costs, giving total
development funding of $50 million.

In addition, a peak working capital requirement of circa $33 million may be
required as mined ore will have to be stockpiled for 6 months during the winter,
when the fjord is frozen over and not accessible to shipping.  This figure
includes provision for a further 4 months to cover the time taken to ship,
process and sell concentrate.  Consideration is being given to funding this
working capital by a facility linked to a sales off-take agreement.

Sources of funding include a variety of debt and equity and the Company is
currently working closely with its brokers, banks and potential off-take
partners to create a coordinated funding plan.  The Company has access to $17.5m
from the Cyrus Facility it obtained in July 2007; this facility is contingent on
the BFS being satisfactory to Cyrus, in form and substance, before October 2008.

Other debt funding sources, such as equipment finance, export credit finance,
working capital or bridging finance and mezzanine funding from strategic
investors and off-takers are being pursued.

A&R will keep the market informed as and when there is material progress to
announce in implementing the coordinated financing plan.

CEO Nicholas Hall commented:

"We have a very special opportunity to develop a highly profitable zinc/lead
mine in Greenland and, thanks to the Enhanced Management Development Plan, we
are now making good progress in our discussions with the various stakeholders
and potential sources of development funding to meet our overall financing
needs.  With the support of our broker, Fox Davies, A&R is confident that the
funding required will be forthcoming to allow us to develop Black Angel and
create a new Zinc province in Greenland."

Enquiries:

Angus & Ross plc

Robin Andrews, Chairman                                           01751 430 988
Nicholas Hall, Chief Executive                                    07931 709 053

Fox-Davies Capital                                                0207 936 5200
Daniel Fox-Davies
Richard Hail

Bishopsgate Communications Limited                                0207 562 3366
Nick Rome

Landsbanki Securities (UK) Limited                                0207 426 9000
Jeff Keating
Fred Walsh

NB: This release has been approved by the Company's technical staff in
accordance with the recent Guidance Note for Mining, Oil and Gas Companies
issued by the London Stock Exchange in respect of AIM companies, which outlines
standards of disclosure for mineral projects.

These include Dr Tom Elder, Director, who holds a BSc and Doctorate in Geology
from Durham University, is a Fellow and former Member of Council of The
Institution of Mining and Metallurgy and a Fellow of The Geological Society.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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