ANGEL MINING PLC 
By 30 November 2012
Un-audited financial information for the six months ended 31 August 2012
The Directors of Angel Mining, the Greenland-focused mining and exploration company, report the Company's unaudited interim results for the six months ended 31 August 2012.
Highlights
FINANCIAL RESULTS
The loss for the period amounts to $14,600,000 (2011: $1,654,000), the Company's cash and bank balances amounted to $625,000 compared to $252,000 at 31 August 2011. The loss includes a provision of $10,805,000 for the impairment of the value of assets at Nalunaq Gold Mine. This is a conservative estimate of the total investment in Nalunaq which may not be recovered from future cash generation. The result for the period has benefited by the impact of the accounting treatment of the Company's Joint Ownership Share Plan ("JSOP") equity incentive scheme. As a result of the significant drop in the Company's share price and a change in the fair value of the associated JSOP liability, there was a positive impact of $419,000 (2011: $834,000) on the profit and loss statement.
The Directors have set a production target of 1,500 - 2,000 ounces of gold per month and now believe that this will be achieved consistently from Q1 2013. Although the Company has been producing and selling gold on a regular basis since September 2011, it has not yet, for accounting purposes, reached 'commercial production'. In keeping with IFRS guidance and normal practice for companies within the mining sector, the Company will commence commercial production when it can consistently achieve 70% of its monthly minimum production target (i.e. 1,050 ounces per month).
Until this is achieved, the operating costs less revenue will be capitalised as development costs. For this reason, no revenue from gold sales or costs of production has been recognised in the income statement during the six months ended 31 August 2012 or the comparable periods.
The latest assessment of recoverable gold at Nalunaq and our best understanding of the associated income, based on an average gold price of $1,700 per ounce, and of the operating costs to extract the gold, suggests that the mine should generate at least $25,000,000 of free cash before we have to face the possibility of mine closure. Consequently, we have taken an impairment charge of $10,805,000 against the assets at Nalunaq, reducing the value carried forward at 31 August 2012 to $25,000,000. It is highly likely that in future months the resource assessment will change. It is possible that we could find additional high grade ore to mine, particularly in the Mountain Block. If this is the case, the life of mine may be extended and all or part of the impairment charge may be reversed.
The geologist who first discovered the Nalunaq deposit believes that there may be other gold bearing intrusions in the Nalunaq mountain and we are working with Nuna Minerals A/S to see if there is any geological evidence to justify a more extensive exploration programme. In September this year, a team of geologists from Nuna Minerals traversed the mountain taking rock samples to see if they could find other outcrops of gold bearing quartz or other indicative evidence. We expect to get their report before the end of 2012.
OPERATIONS
Nalunaq
The AGM was held on 31 August 2012 and, at that date, the Company made a production forecast for September, October and November, which assumed that the mine would be able to access higher grade ore from pillars during this period. Unfortunately, the BMP took longer than expected to provide the mining permit and an essential piece of equipment was delivered late. The situation was compounded in September by operational problems encountered by the Company's fuel supplier, Polaroil, such that they were unable to deliver oil as consistently as required. In consequence, all solid material in the plant was pumped to tailings in case the tank agitators had to be switched off. This would have resulted in material settling in the tanks and there would have been a very expensive and time consuming task to dig the material out. This was avoided but the site went for a week with no mining or processing activity until the fuel arrived. It then took two weeks to recharge the processing system before gold stripping could recommence.
Fortunately, these problems are now behind us and both mine and process plant are back in production. Pillar mining is scheduled to commence in December 2012 and, provided no major problems are encountered with the first selected pillars, this will be one of the principle sources of high grade ore during 2013 together with material from Mountain Block.
The table below sets out the production and sales data for Nalunaq from the first gold pour up to the date of this announcement.
| Doré produced (kilograms) | 339.1 |
| Doré shipped (kilograms) | 339.1 |
| Gold recovered (ounces) | 9,877 |
| Gold content of doré (%) | 90.6% |
| Gold sold (ounces) | 9,877 |
| Average gold price achieved (per ounce) | 1,665.51 |
| Silver recovered (ounces) | |
| Silver content of doré (%) | 7.9% |
| Silver sold (ounces) | 856 |
| Average silver price achieved (per ounce) | 30.89 |
There have been some important changes to the Nalunaq management team in recent months. Steve Ainsworth left the Company in June and Alex Hamilton left in October. In July, Nigel Handley joined as Deputy General Manager. He is a mining engineer with extensive experience of mine management and since he joined he has led the mining team and, in particular, has directed the preparations for pillar mining. Since Alex left, Nigel has also taken full responsibility for the General Manager role. In late October, Jonathan White joined us as plant manager. He is a metallurgist with over 20 years experience of managing gold processing plants.
The Company has appointed Peter Connery as Chief Operating Officer and Peter will commence work in mid December. He had a distinguished military career and then took his team building expertise into the mining industry where he has been general manager for a number of large mines in Africa. He will immediately take full responsibility for the day to day running of Nalunaq and Nigel Handley will support him as Deputy General Manager. Nigel will also start work in the New Year on permit applications and other project work for Black Angel. In January Bob Austin joins as mine manager. Bob is a mining engineer and has worked as a mine manager for many years with Anglo American Corporation, mainly on mines in Africa.
Black Angel
The decline in commodity prices, with zinc now trading below $2,000 per tonne and lead just above $2,000 per tonne, has had a detrimental impact on the economic viability of the Black Angel project. In order to address this issue the Company is looking increase the life/scale of the operations by expanding the JORC compliant resource base and also by reducing operating costs to below $1,000 per tonne.
The resource issue may be solved by drilling some additional exploration holes in the Deep Ice Zone and work is proceeding to see if this could be achieved in 2013. An initial internal assessment indicates that the geologists will probably need another 10 holes to be drilled. A more detailed assessment is currently being undertaken.
A substantial component of the operating costs is the cost of fuel oil. Each year, at today's prices, the plan suggest that the annual cost for fuel will be in excess of $15 million and that this could be reduced to below $4 million, if the power could be supplied through an in-situ hydro-electric operation. A study was undertaken by Cominco in the 1970s and this indicated that there is sufficient water in the South Lake to generate electricity for the project. Niras Greenland A/S has been commission to produce a pre-feasibility study of the scheme based on existing data. Their report will indicate what work needs to be done to complete a full design and feasibility study and will also estimate the cost of building a plant capable of generating approximately 6MHZ of electricity throughout the year.
The enlarged resource and the potential impact of hydro-electric power could then enable the Company to produce a new Bankable Feasibility Study which should then significantly improve the Company's ability to raise the funds necessary to take the project into production.
FINANCE
The recent funding, provided by Cyrus, amounting to $3,750,000 has enabled the Company to overcome its recent setbacks and, it is now expected that Nalunaq will generate cash to meet all Group funding needs.
Discussions are ongoing with Cyrus Capital Partners with regard to the refinancing of Angel Mining plc, which will include the renegotiation of the short term debt repayment terms. It had been hoped that a financial restructure plan could have been agreed by the end of November but this is now expected to be finalised in the New Year. Cyrus is our largest stakeholder and a long-term investor in the business. We anticipate that they will play a significant role in the future development of the Company.
Issue of new shares
On 3 April 2012, 71,428,565 new ordinary shares were issued at 1.4p as the result of a private placing, raising $1,616,454.
On 5 April 2012, 15,588,998 new ordinary shares were issued to YA Global Master SPV at 1.66p per share, being the first draw on the new SEDA facility, raising $415,424.
On 4 May 2012, 18,618,073 new ordinary shares were issued to YA Global Master SPV at 1.4p per share, being the second draw on the new SEDA facility, raising $420,848.
On 16 August 2012, 25,800,000 new ordinary shares were issued to YA Global Master SPV at 1.0p per share raising $404,579 which was used to repay a portion of the outstanding promissory note with Yorkville.
New borrowings
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