Parys Update - 11 Jan 2021
Anglesey Mining plc (“Anglesey”) is pleased to report the positive results of the Preliminary Economic Assessment (PEA) on its Parys Mountain copper-zinc-lead-gold-silver project on the island of Anglesey in North Wales prepared by Micon International Limited (“Micon”) an independent consulting firm.
- Updated Resource Estimate of 5.2 million tonnes of Indicated together with 11.7 million tonnes of Inferred
- Financial model for Expanded Case shows pre-tax NPV10 of $US120 million, (£96 million), 26% IRR and 12 year mine life
Parys Mountain Property
The Parys Mountain property hosts a significant polymetallic zinc, copper, lead, silver and gold deposit. The site has a head frame, a 300m deep production shaft and planning permission for operations. The group has freehold ownership of the minerals and surface land. Infrastructure is good, political risk is low and the project enjoys the support of local people and government. The company's intention is to develop, build and operate a producing mine at Parys Mountain to create value for shareholders in an environmentally, socially, and ethically responsible manner for the benefit of all stakeholders.
An independent JORC resource estimate completed in 2012 by Micon International Limited reported a resource of 2.1 million tonnes in the indicated category at 6.9% combined base metals and 4.1 million tonnes at 5.0% combined base metals in the inferred category, with substantial exploration potential. In July 2017 a new Scoping Study using the 2012 resource estimate was prepared by Micon International Limited and Fairport Engineering Ltd. The Scoping Study demonstrates a viable mine development mining 1000 tpd to produce lead, zinc and copper concentrates and yielding a healthy financial rate of return.
Parys Mountain – Moving steadily forward
The 2017 Scoping Study demonstrated a viable mine development and a healthy financial rate of return based on copper prices of $US2.50 per pound, zinc of $US1.25 per pound and lead of $US1.00 per pound, generating an overall net smelter return of $US270 million with an IRR of 26% and an NPV10 of $US27 million.
In late 2018 Anglesey entered into a Project Development and Cooperation Agreement with QME Mining Technical Services to carry out an agreed programme of engineering and optimisation studies relating to the future development of Parys Mountain. This has been a major exercise that expanded as it progressed, as described and discussed in detail in the Strategic Report included in the 2020 Annual Report.
3D Representation of proposed decline, Morris Shaft and resources
3D Representation of proposed decline, Morris Shaft and resources
The primary objective was to determine the optimum production plan for Parys Mountain, but importantly to look at the opportunity of including some or all of the previously identified inferred resources in a revised and larger development plan that would increase the projected life of the Parys Mountain mine, with potential positive outcomes on the project economics.
As previously reported, QME identified the potential for improvements in the development plans contained in the 2017 Micon Scoping Study which was based on mining only the 2.1 million tonnes of indicated resources reported by Micon in 2012. The QME work suggests that that the project can be further improved if the potential mineable tonnage can be increased by using a lower cut-off grade, and that at a production cut-off of $48 per tonne, approximately 5.25 million tonnes in situ within the designed stoping blocks would be available in the White Rock and Upper Engine Zones for inclusion in a detailed life-of-mine schedule. This approach allows the unlocking of mineralised areas within the footprint that were not previously modelled due to not meeting the higher cut-off grades used in the Micon Scoping Study. These 5.25 million tonnes are substantially higher than the mineable tonnage of 2.1 million tonnes used in the 2017 Scoping Study.
QME then reviewed all the inferred resources originally reported by Micon in deposits other than White Rock and Upper Engine Zones. These other zones, the Lower Engine, Garth Daniel and Northern Copper Zones, are located within an area approximately 1.3 km east-west and 370 metres north-south and lie immediately to the northeast of the White Rock and Engine zones. This phase of the QME work has identified 5.5 million tonnes of modelled inferred resources that could be considered for inclusion in detailed mine design.
The third phase, which started in late 2019 and continued into 2020, involved developing mine production models based on these enhanced tonnage projections at a range of annual production scenarios that would be consistent with maintaining an optimised life of mine.
The QME work concluded that using the lower cut-off block models, there is an opportunity to develop a new mineable model for either the White Rock and Upper Engine zones alone, as per the Micon plan, or extending this to the entire known resource zones, by re-defining the mining shapes and the stoping plan, followed by a new development plan and schedule.
Mining these enhanced tonnages will require an expansion of the planned annual treatment rate of 1,000 tonnes per day used in the Micon Scoping Study, potentially to 1,500 tonnes per day. To optimise the mine life, and dependent upon the extent of inclusion of the more distant zones, this rate could be increased in the further expanded case of all zones to perhaps 3,000 tonnes per day.
The Directors have long believed that the potential for the Parys Mountain project is far greater than that developed from the indicated resources only. QME’s work confirms the overall prospectivity of the Parys Mountain project and the potential for demonstrating five deposits or zones with combined resources in the range of 10 million tonnes and that the projected mine life could be extended from the Micon Scoping Study base case of 8 years through to a range of 12 to 18 years.
The Cooperation Agreement with QME has enabled the completion of a substantial amount of further work on mine planning design and project optimisation on Parys Mountain at no immediate cost to Anglesey and at no dilution to Anglesey’s current shareholders. The QME work has been of great benefit in establishing the parameters for determining the optimum mine production model and we are extremely appreciative of the work that QME has completed. This work will form the basis for commissioning a new Preliminary Economic Assessment, and subject to financing being available, leading on to a Preliminary Feasibility Study.
In August 2020 the company completed a private placing that raised £200,000 gross together with warrants that could raise an additional £225,000 gross during the next 12 months. This will be used to bring the optimisation study into a compliant basis by incorporating the QME work into an updated Scoping Study or Preliminary Economic Assessment, as well as for general corporate purposes. The directors are very pleased with this financing, which represents significant support for Anglesey Mining.
Preliminary Economic Assessment
Anglesey Mining plc reported on 01 Oct 2020 that it has appointed Micon International Limited (“Micon”) to carry out a Preliminary Economic Assessment (“PEA”) on its Parys Mountain copper, zinc, lead, gold and silver project, located on the island of Anglesey in North Wales.
Micon is an experienced minerals industry consultant that has reviewed mining projects across all continents. Micon has long experience with Parys Mountain commencing in 2006 and including preparation of the JORC compliant resource estimate in 2012 and the Scoping Study in 2017. This background will enable Micon to move swiftly and knowledgeably to completion of this important PEA.
The PEA is the next step in the development of Parys Mountain on the road to production and follows from the optimisation studies recently completed by QME Mining Technical Services (“QME”). The QME work highlighted up to 10 million tonnes of potentially mineable material available at Parys Mountain which is significantly larger than the 2.1 million tonnes of indicated resource that was utilised in Micon’s positive 2017 Scoping Study.
QME also identified that it should be possible to utilise a lower cut-off grade for mine planning purposes than used in the Micon 2017 study. QME based this on their review of the expected operating costs at Parys Mountain based on their long and detailed experience in underground mine operations in Ireland and elsewhere.
As a result of the QME work it is expected that the planned production rate of 1,000 tonnes per day utilised in 2017 will be expanded, and that the projected mine life of just 8 years will be significantly extended.
In preparing the PEA, Micon will review all the QME work including capital and operating cost estimates, ore-body modelling and mine production planning. It is intended that Micon will evaluate several separate development scenarios based on the various ore zones available for mining and on differing production rates to best optimise the assets at Parys Mountain. Micon will incorporate the results into detailed production and financial models to produce comprehensive and compliant reports that will be in a form that can be publicly released. It is expected that the PEA will be finalised by the end of November.
Subsequent to completion of the PEA, Anglesey would intend to press on to undertake a Preliminary Feasibility Study to support financing for development of the mine at Parys Mountain.
Mineral exploration potential at Parys Mountain
In addition to the indicated and inferred resources reported by Micon, the Parys Mountain area, over which the group holds the mineral rights, contains numerous indications of mineralisation across several kilometres many of which have been disclosed in earlier reports and releases.
- Consultants and Technical Staff
- Summary of Parys mineral resources pre 11 January 21 release of PEA
- 3D visualisation of ore deposits
- An introduction to Parys geology - SGA 2009 abstract
- Abstract of geological paper (1 page) on Parys Mountain in 2001 by Barrett, MacLean and Tennant and conclusions (35 pages) of their 1999 geological report
- Brief historical outline of Parys Mountain mine up to 2007
- Some geological history notes on Parys Mountain from 2000
- Geological notes on Parys deposits from 1998