AYM Anglesey Mining Plc

 
TIDMAYM 
 
8th September 2017        LSE:AYM 
 
                         Parys Mountain Project Update 
 
                        Planning for production in 2020 
 
Anglesey Mining plc ("Anglesey" or the "Company") is pleased to provide the 
following update on the Parys Mountain project in North Wales. 
 
On 24th July 2017, Anglesey reported on the Scoping Study completed by Micon 
International Limited and Fairport Engineering Limited.  The financial figures 
used in the Scoping Study were based on metal prices prevailing at that time. 
Since July all the metals to be produced at Parys Mountain have increased in 
price with copper at $3.10/lb compared to $2.50/lb in the Scoping Study, zinc 
has increased to $1.40/lb compared to $1.25/lb in the Study and lead has moved 
to $1.09/lb compared to $1.00.  There has also been upward movement in both 
gold and silver.  In contrast, the pound has strengthened somewhat against the 
US dollar and is now trading around $US1.30 to GBP1.00 compared to $US1.25 in the 
Study. 
 
The overall impact of these changes would be very positive on the pre-tax NPV 
and IRR. 
 
The fundamentals underlying the recent increases in these metal prices are well 
founded and are likely to continue to support upward growth through the next 
several years. 
 
Anglesey believes that it is now opportune to progress a number of steps to 
move the Parys Mountain project forward with the expectation that financing can 
be obtained and the project developed to production as soon as practicable. 
The major steps to be taken in the short term will include: 
 
  * Commencement of an Environmental Impact Assessment 
  * Conversion of the Scoping Study to a Definitive Feasibility Study 
  * Recruitment of key corporate staff 
  * Discussions with potential providers of project finance, including 
    investment funds, metal traders, smelters and banks 
 
It is planned to immediately commence all of these steps with the hope that a 
Definitive Feasibility Study, including an Environmental Impact Assessment, can 
be completed in the first half of 2018 so that meaningful project financing 
discussions can take place immediately thereafter.  It is the intention of the 
Company to bring in new personnel into key positions to drive these matters 
forward and move the project and the Company to a successful long-term future. 
 
The Company has adequate funds to initiate these steps and continue its normal 
corporate and limited site operations but will need to raise some additional 
funding to complete these development targets.  This will not likely involve 
significant dilution for current shareholders. 
 
Providing this timetable can be met and discussions on project financing are 
well advanced by the middle of next year, it would be possible for project 
construction to commence before the end of 2018 with initial production 
targeted for the first half of 2020. 
 
Parys Mountain Project 
 
The Parys Mountain Scoping Study base case envisages a mining rate of 1,000 
tonnes per day, to produce an average annual output of 12,500 tonnes of zinc 
concentrate at 57% Zn, 6,400 tonnes of lead concentrate at 52% Pb and 3,500 
tonnes of copper concentrate at 25% Cu, annually, over an initial mine life of 
eight years. 
 
The overall net smelter return (NSR) for the three concentrates, including the 
silver and gold precious metals contributions, is expected to total more than 
$270 million at the forecast metal prices used for the base case. 
 
The base case yields a pre-tax net present value of $33.2 million, or GBP26.6 
million, at a conservative 10 per cent discount rate, using metal prices of 
$1.25 per pound for zinc, $1.00 per pound for lead, $2.50 per pound for copper, 
$17.50 per ounce for silver and $1,275 per ounce for gold and at an exchange 
rate of GBP1.00 = $US1.25. With an estimated pre-production capital cost of $53 
million, or GBP42 million, this results in an indicated internal rate of return 
(IRR) of 28.3%. 
 
Using longer term metal price projections of $1.35 per pound for zinc and $3.00 
per pound for copper the NPV10 would be $43.2 million, or GBP34.6 million.  At an 
8% discount rate, used to reflect the relatively low risks of the project given 
its advanced level of development and low political risk in the UK, the NPV8 
would be enhanced to $41 million, or GBP32.8 million, for the base case metal 
price scenario and to $53 million, or GBP42 million, for the higher longer-term 
metal prices, with an IRR of 33%. 
 
Importantly, the Scoping Study was based on only the 2.1 million tonnes of 
indicated resources reported by Micon in 2012.  Micon had also reported a 
further 4.1 million tonnes of inferred resources which were not incorporated 
into the Scoping Study.  It is expected that a high proportion of these 
inferred resources will be converted to indicated probable reserves once 
exploration drilling from underground takes place.  These additional resources 
would be processed through the same concentrator plant and would significantly 
increase the projected life of the mine, to perhaps double the projected 
mine-life to 15 or 18 years, and enhance the NPV. 
 
 
 
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 also 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 11.8% 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 572517 
Danesh Varma, Finance Director +44 (0)207 653 9881 
Elliot Hance, Beaufort Securities +44 (0)207 382 8300 
 
 
 
 
 
END 
 

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