Anglesey Mining plc
12 May 2017 LSE:AYM
Parys Mountain Scoping Study Update
Anglesey Mining plc (“Anglesey” or the “Company”) reports that work on Scoping Study on the Parys Mountain copper-lead-zinc project in North Wales is continuing. The study is being undertaken by Micon International Limited and Fairport Engineering, in collaboration with company personnel, based on the resource estimate calculated by Micon in 2012.
The 2012 JORC Code compliant resource estimate reported a resource of 2.1 million tonnes at 6.9% combined base metals in the indicated category and 4.1 million tonnes at 5.0% combined base metals in the inferred category.
The initial approach adopted for the Scoping Study was a plan to mine these resources at 500 tonnes per day, or 165,000 tonnes per annum, commencing with development of the mineral deposits closest to surface. The Company had chosen this throughput rate as it was believed that the low capital cost associated with this approach would provide the most beneficial outcome. Given the level of indicated resources defined by Micon in 2012, this would result in a mine life of around 16 years, with mining of the indicated resources only and none of the inferred resources.
The Company has reviewed the initial outcome of the study, based on a daily processing plant input of 500 tonnes per day of ore, and concluded that an accelerated development of the indicated resources over a shorter initial mine life should be economically more attractive.
Fairport has considered some processing alternatives, specifically the introduction of dense media separation, that would increase the effective daily production rate by about 40% with only a limited increase in capital. This would result in a shortened mine life based on the existing indicated resources and should generate an enhanced financial outcome.
In addition, on reviewing the current indicative levels of the capital cost of mill equipment, including readily available used processing plant, it was felt that construction of a larger processing plant with a higher throughput rate could be justified. The feasibility study completed in 1991 was based on a throughput rate of 1,000 tonnes per day, or 350,000 tonnes per year.
Obviously, a higher initial daily throughput rate would require additional mine development, a higher capital cost and result in a shortened mine life based only on the existing 2.1 million tonnes of indicated resources, but it should generate an enhanced financial outcome.
However, recognising the significant inferred resources of 4.1 million tonnes, being almost twice the current indicated resources, it would be expected that during the operation of the mine definition and exploration drilling would be carried out from underground locations that should be expected to bring much of the current inferred resources into the indicated category, and that would then extend the mine life significantly.
Based on an initial review of the preliminary results of the draft Scoping Study, Anglesey has asked both Micon and Fairport to consider alternative production and throughput scenarios, at various levels between 500 and 1,000 tonnes per day, and expects to receive modified mine production schedules and alternative capital cost estimates in the near future. The inputs will then be incorporated into updated financial models, with a view to having optimized development scenarios available for consideration before the end of June 2017.
About Anglesey Mining plc
Anglesey is carrying out development and exploration work at its 100% owned Parys Mountain zinc-copper-lead deposit in North Wales, UK with a reported resource of 2.1 million tonnes at 6.9% combined base metals in the indicated category and 4.1 million tonnes at 5.0% combined base metals in the inferred category.
Anglesey holds a 6% interest and management rights to the Grangesberg Iron project in Sweden, together with a right of first refusal to increase its interest by a further 51%. Anglesey also holds 11.2% of Labrador Iron Mines Holdings Limited which has direct shipping iron ore deposits in Labrador and Quebec
For further information, please contact:
Bill Hooley, Chief Executive +44 (0)7785 57251
Danesh Varma, Finance Director +44 (0)207 653 9881
Elliot Hance, Beaufort Securities +44 (0)207 382 8300