Anglesey completes scoping study for Wales mine

JOHANNESBURG (miningweekly.com) – Project developer Anglesey Mining on Monday published the results of its scoping study for the Parys Mountain copper/zinc/lead project, in north Wales, which demonstrates a viable mine development.

The study, which Micon International and Fairport Engineering prepared, envisages a mining rate of 1 000 t/d, to produce an average of 14 000 t/y of zinc concentrate at 57% zinc, 7 200 t/y of lead concentrate at 52% lead and 4 000 t/y of copper concentrate at 25% copper, over an initial eight-year mine life.

It is expected that each of the three base metal concentrates will be sold to smelters in Europe.

The overall net smelter return for the three concentrates, including the silver and gold precious metals contributions, is expected to total more than $270-million.

The base case yields a pretax net present value (NPV) of $33.2-million, or £26.6-million, at a 10% discount rate, using current prices of $1.25/lb for zinc, $1/lb for lead, $2.50/lb for copper, $17.50/oz for silver and $1 275/oz for gold.

With an estimated preproduction capital cost of $53-million, or £42-million, the project has an indicated internal rate of return (IRR) of 28.3%.

CEO Bill Hooley commented that the scoping study delivered a “healthy” financial IRR.

“The base case economic model at 1 000 t/d indicates a robust project at consensus forecasts for the long-term prices of zinc and copper. This is the first detailed economic study of the Parys Mountain project for a number of years and, based on the current availability of reconditioned process plant, the estimated pre-production capital cost for the project is at a level that could be financeable.”

Anglesey said Micon and Fairport had recommended that further work be carried out, including more detailed mine and stope design, underground geotechnical studies, additional infill drilling in some locations, more detailed engineering studies, additional metallurgical test work, including work to improve recovery of specific metals to their own concentrate, and review of tailings management and paste processes. Several opportunities for cost reduction or productivity improvement had also been identified for further study.

The company said it planned to carry out these and other activities as suitable funds were available.  This would lead to a more detailed production and costing feasibility study to support project financing.

“I have been involved with this company and the Parys Mountain project for many years, and I am encouraged that that many of the variables and moving parts, including metal prices, treatment charges and used plant availability, have now moved in our favour and present a real and realisable opportunity for Parys Mountain.  There is of course still much to be do but we now have a clear path forward.  We will need to expand the management team to make this happen and I look forward to being involved with the future financing and the path to development, construction and eventual mine production,” commented chairperson John Kearney.

Based on the positive results of the scoping study, the company said it would engage in discussions with potential financiers or partners for the development of the project. 

The 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. Anglesey said it expected that a high proportion of these inferred resources would be converted to indicated resources. 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 mine-life to 15 or 18 years, and enhance the NPV.