Anglesey Mining plc (“AYM”) is pleased to announce a major
development on the path forward for the advancement of its Parys
Mountain copper, zinc, lead, gold and silver project, located on
the island of Anglesey in North
Wales.
Under a Project Development and Cooperation Agreement
(“Agreement”) entered into with QME Mining Technical Services, a
division of QME Ltd, (“QME”), QME will, at no cost to AYM, carry
out an agreed programme of design, engineering and optimisation
studies relating to the future development of Parys Mountain.
Over the period to the end of June
2019, QME will carry out a detailed review of various
development and mining alternatives for Parys Mountain. The primary
objective is to determine the optimum production plan for Parys
Mountain, utilising all available and potential means of accessing
both the indicated resources and inferred resources, (as currently
defined and estimated by Micon International) at various “cut-off”
grades.
Anglesey Chief Executive, Bill
Hooley, said: "We consider this to be a very important
and positive step forward in the development of the Parys Mountain
mine. QME is experienced in underground mine development and has
developed and recruited the necessary skills in mine planning to
deliver local and relevant underground mining expertise to Parys
Mountain that will assist Anglesey to move forward with the
development of the Parys Mountain project at no direct cash
cost to Anglesey or dilution of its shareholders.”
AYM has agreed to grant QME various rights and options relating
to the future development of Parys Mountain. On completion of the
optimisation study and delivery to AYM of the results thereof:
(i) AYM will
award QME, on an exclusive basis, contracts for the development of
the decline and underground mine development, including
rehabilitation of the shaft. This will be done on terms to be
agreed following a decision by AYM to proceed with the development
of Parys Mountain;
(ii) In the event
Anglesey and QME are not able to agree terms AYM may offer such
contracts to third parties, subject to a right of first refusal in
favour of QME, and subject to a payment by AYM to QME, upon the
award of such contracts to a third-party, of a break-fee; and
(iii) In addition, AYM will
grant to QME the right and option, upon completion of a
Prefeasibility Study (“PFS”), to undertake at QME’s cost and
investment, the mine development component of the Parys Mountain
project, including decline and related underground development and
shaft development, with a scope to be agreed, to the point of
commencement of production, in consideration of which QME would
earn a 30% undivided joint venture interest in the Parys Mountain
project.
Parys Mountain - 2017 Scoping Study
Recommendations
In July 2017 a Scoping Study on
Parys Mountain, was prepared by Micon International Limited (Micon)
and Fairport Engineering Ltd. The Scoping Study envisages a mining
rate of 1,000 tonnes per day, to produce an average annual output
of 14,000 tonnes of zinc concentrate at 57% Zn, 7,200 tonnes of
lead concentrate at 52% Pb and 4,000 tonnes of copper concentrate
at 25% Cu, over an initial mine life of eight years.
Following completion of the positive 2017 Scoping Study,
Anglesey has been working to progress the Parys Mountain project
towards production. The 2017 Scoping Study recommended
further work as interim steps towards undertaking a PFS, including
more detailed mine planning and design, more engineering studies,
additional metallurgical test work and a review of tailings
management and environmental and planning permissions, all of which
will require new and further financing. The Agreement with QME
announced today is a major component of this and is a very positive
development that will significantly advance the Parys Mountain
project
Optimisation Studies and Revised Mine
Plan
The 2017 Scoping Study was based on mining only the 2.1 million
tonnes of indicated resources reported by Micon in 2012. Micon had
reported a further 4.1 million tonnes of inferred resources which
were not incorporated into the Scoping Study. Development of even
half of these inferred resources not included in the Scoping Study,
would significantly increase the projected life of the Parys
Mountain mine with potential positive outcomes on the project
economics.
Under the Agreement QME will examine a revised mine model with
the objective of incorporating some of the inferred resources,
including part of the higher-grade Engine Zone inferred resources,
into the earlier years of the mine plan with the intention of
bringing forward cashflows and increasing the life of the mine to
at least 10 years.
The 2017 Scoping Study was based on the initial development and
production from the White Rock
zone using a newly developed decline eventually leading to
development of the deeper Engine zone and then the rehabilitation
and use of the Morris Shaft as a hoisting facility.
The QME review will examine whether different approaches to
accessing the orebodies, particularly by early dewatering,
rehabilitation and recommissioning of the Morris Shaft, could
provide early access to the higher-grade Engine zone resources.
This should have a beneficial effect upon both the net present
value of the operation and the pay-back period.
It is expected that these optimisation studies will be completed
by the middle of 2019 and, subject to financing being available,
would then form the basis for commissioning of a Preliminary
Feasibility Study to lead to an overall project financing
package.
Following delivery of the optimisation studies pursuant to the
Agreement, and the subsequent completion of a PFS, QME will have
the option to undertake at QME’s investment, the mine development
component of the Parys Mountain project, including decline and
related underground development and shaft development, in
consideration of which QME would earn a 30% undivided joint venture
interest in the Parys Mountain project, thereby significantly
reducing AYM’s capital cost requirements.
About QME
QME Limited, founded in 1987 by its current Managing Director
Peter McParland, is based in
Navan, County Meath, Ireland from which it operates
several divisions and provides a wide range of services in the
fields of both mine development and mine operations to the local
and international mining community.
QME Mining Technical Services division undertakes contract
mining projects and employs an ‘in-house’ team of highly
experienced operations managers, underground supervisors, miners,
fitters and electricians. QME has carried out both large- and
small-scale underground mine development contracts, providing all
technical evaluation and budgeting services, personnel, management,
equipment and maintenance.
Current and past clients include: Boliden Tara Mines,
Navan, Ireland; Dalradian Gold Limited, Curraghinalt,
Northern Ireland; Lafarge Holcim,
Glensanda Super Quarry, Scotland;
Lundin Mining Galmoy Mine, Ireland; Vedanta Lisheen Mine, Ireland; Irish Base Metals Ltd., Tynagh Mine
and Gortdrum Mine, Ireland; Saint
Gobain, Gyproc, Ireland; Northgate
Exploration Ltd, Canada; and
Campbell Resources, Canada.
QME Equipment Division is a large provider of new and
re-manufactured underground and open pit mining equipment to the
international mining industry worldwide, employing a highly skilled
workforce of mechanical and technical staff with the capability to
repair or fully overhaul a wide range of mining equipment.
About Anglesey Mining plc
Anglesey is carrying out feasibility and development work at its
100% owned Parys Mountain copper, zinc, 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 12%
of Labrador Iron Mines Holdings Limited which holds 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)7740 932766
For further information on QME, please contact:
Peter McParland, Managing
Director QME: +353 (0) 87 2566601 www.qme.ie