The Parys Mountain project 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 on the western portion of the property where all its current resources are located. 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.
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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
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.