TIDMAYM
Anglesey Mining plc, a UK mining company
Projects:
100% ownership of the Parys Mountain underground copper-zinc-lead-silver-gold
deposit in North Wales, UK where an independent Preliminary Economic Assessment
announced in January 2021 showed:
· a financial model for an expanded case at 3,000 tpd with a pre-tax NPV10% of
US$120 million, (£96 million), 26% IRR and 12-year mine life
During the year, Anglesey released an updated resource estimate of 1.3 million
tonnes of Measured resources, 4.0 million tonnes of Indicated resources together
with 11.7 million tonnes of Inferred resources
A 49.7% interest in the Grängesberg Iron project in Sweden, up from 19.9% last
year. Anglesey has management rights and a right of first refusal to increase
the Group's interest to 100%. At Grängesberg, an independent Pre-Feasibility
Study announced on 19 July 2022 showed:
· Probable Ore Reserves of 82.4 million tonnes of supporting a 16-year mine
life with annual production of 2.5 million tonnes of concentrate grading 70%
iron ore
· Post-tax NPV8% of US$688 million with an IRR of 25.9% after tax
A 12% shareholding in Labrador Iron Mines Holdings Limited which holds Direct
Shipping Ore (DSO) deposits of iron in Canada where an independent Preliminary
Economic Assessment of its Houston project published in March 2021 showed:
· Potential for production of 2 million dmt of DSO per year, with an initial
12-year mine life, for total production of 23.4 million dmt of product at 62.2%
Fe over the life of the mine
· NPV8% CAD109 million at a conservative base case iron ore price with a 39%
IRR and a 12-year mine life
Chairman's Letter
[image]To Anglesey Shareholders
The past year has seen a continuation of global uncertainty generated by the
ongoing conflict in Ukraine and other potential flashpoints. Globally, inflation
has also remained stubbornly high leading to a `cost-of-living' crisis in many
countries across the world. Meanwhile, economic growth has been slow, even in
China, which placed a cloud over metal prices.
Despite the global macro uncertainty, very encouraging progress was made at both
our Parys Mountain copper-zinc-lead-silver-gold project and our iron ore project
in Sweden. While equity markets remained very challenging for junior companies,
we successfully raised £865,000 in May 2022, attracting new institutional
investor support, and a further £1.5 million in new financings in May and July
2023.
Review of Activities
The momentum from the previous year was maintained at Parys Mountain. Strong
assays were received from the White Rock/Engine Zone infill drilling programme,
which fed into the mineral resource update that was completed in April 2023.
Importantly, 92% of the White Rock and Engine Zone resources are now in the
Measured and Indicated categories, which represents a significant increase in
confidence - a very important aspect that will feed into the next round of mine
design and optimisation work.
From a permitting perspective, modern mines are required to place significant
emphasis on the management and disposal of tailings. The original planning
permissions for Parys Mountain were based on a conventional valley fill, wet
tailings disposal. Modern best practice required a rethink of this method with
Knight Piésold completing the conceptual design for a dry-stack tailings
management facility in the valley to the south of the mine infrastructure. This
conceptual design highlighted that this location has the potential to store
almost 7.0 million tonnes of dry-stacked tailings, more than sufficient to
support the expanded production scenario evaluated in the 2021 Preliminary
Economic Assessment.
Environmental baseline studies continued at Parys Mountain, and the required Pre
-Application Report was submitted to the North Wales Minerals and Waste Planning
Service, marking the formal commencement of the consent process. This was
followed up with the initial Pre-Application Consultation meeting between
Anglesey Mining and statutory consultee groups, including Natural Resources
Wales, Cadw and multiple Council departments.
In Sweden, a Pre-Feasibility Study Update for the Grängesberg Iron Ore Project
was completed in July 2022 following which discussions commenced with
environmental consulting groups to start planning the baseline environmental
studies as recommended in the Pre-Feasibility Update and a requirement for the
Bankable Feasibility Study. During the year, we increased our stake in
Grängesberg Iron Mines AB, the holding company, to 49.7% through the acquisition
of a 29.8% stake for a value of £525,000 from our local partner, Roslagen
Resources AB. Meanwhile, in Canada, Labrador Iron Mines continued to advance its
Houston direct shipping iron ore project toward production.
Further details on these operational activities may be found in the Strategic
Report.
Sudden passing of Howard Miller, Non-Executive Director
It was with great sadness that we reported the death of our esteemed colleague,
Howard Miller, in December 2022. Howard had been a Non-Executive Director of
Anglesey since 2001, serving as Lead Independent Director from 2013 until his
passing. Howard had a wealth of knowledge and experience across all legal,
financial and management areas, and provided wise counsel and sound advice to
the Anglesey Board and company management. He will be sadly and fondly missed.
Corporate activity
In May 2022, a Placing and Subscription was successfully completed, raising
gross proceeds of £864,416 with institutional and other investors, including the
Chairman and the Chief Executive, at a price of 3.4 pence per share. After the
financial year end, a further £1,500,000 was successfully raised in May and July
2023 at a price of 1.5p per share, which included a 1 for 2 attaching warrant
with an exercise price of 2.5p per share and an expiry of November 2024. The
Chairman and the Chief Executive also participated in this round of funding.
Metal prices
While base metal prices softened over the last year, particularly zinc,
commodities are showing some overall resilience. Demand for metals that are
critical to the global climate transition and clean energy technologies remains
strong, and when combined with the apparent lack of investment on the supply
side, will likely lead to future deficits and higher prices. As a board, we
retain our confident view that the outlook for minerals, particularly for the
copper and zinc minerals at Parys Mountain, and for iron ore where we hold
significant investments, is very encouraging.
In July 2022 the UK Government published the first-ever UK Critical Minerals
Strategy, setting out its approach to accelerating domestic capabilities,
collaborating with international partners and enhancing international markets.
The strategy, refreshed in March 2023, aims to improve the security of supply of
critical minerals to safeguard British industries now and in the future, deliver
our clean energy transition and protect national security and defence
capability. "Modern society relies on critical minerals- from phones to wind
turbines, from cars to fighter jets". "Almost everything we do to communicate,
to get around, to work and to play, is increasingly based, directly or
indirectly, on minerals extracted from the ground many thousands of miles away".
Environmental and social focus
The purpose and objective of Anglesey Mining is to create value for shareholders
in an environmentally, socially, and ethically responsible manner which is also
to the benefit of all stakeholders. We place a high priority on environmental,
social and governance (ESG) matters, and we are committed to being a responsible
mining company, which maintains mutually beneficial long-term relationships with
key stakeholders and the local community. Readers are invited to refer to the
report on Corporate Governance.
Outlook
The results from the work completed at Parys Mountain over the last year provide
extremely encouraging support to the 2021 Preliminary Economic Assessment, which
demonstrated that a significant copper-zinc-lead-silver-gold mine can be
developed at Parys Mountain with very positive financial returns.
In the current year, we are maintaining the previous momentum on all the
required elements of project development. Infill drilling of the large Northern
Copper Zone is scheduled to start in October, targeting conversion of a portion
of that zone from the inferred resource category to the higher confidence
indicated category.
Permitting activities continue ongoing with the feedback from the Pre
-Application Consultation fine-tuning the Environmental Impact and Social
Assessment work programmes. Metallurgical test work is underway on a trade-off
study of pre-concentration methods which will be taken into the next round of
studies and design. Additionally, the metallurgical test work will determine the
environmental parameters of the tailings product, which forms a critical aspect
of the preliminary tailings design.
All of these activities are required to move the Parys Mountain project into the
next stage of study, prior to a fully committed decision to proceed to
production. Completion of each of these stages is a key requirement for securing
the necessary finance to move the project towards production. While all this
work will require some time to complete, it should ensure continuous progress
over the course of the year.
At Grängesberg, we expect to commence the environmental baseline studies during
the year, as recommended in the 2022 Pre-Feasibility Study. Discussions with
potential partners are expected to continue as we determine the most appropriate
route to progress the Grängesberg development opportunity.
In closing I wish to recognise the dedication and enthusiasm of our small
management team, led by Jo Battershill, for the significant progress made over
the past year, and thank our board of directors for their leadership, as well as
consultants and advisors for their contribution. Finally, I should welcome our
new shareholders and thank them, and all our shareholders, for their continued
support.
John F. Kearney
Chairman of the Board
22 September 2023
[image]Strategic report
Despite the global geopolitical instability highlighted in the Chairman's
report, we are very pleased to report that the recommencement of work at Parys
Mountain has delivered very positive results over the course of the year. In
addition, significant progress was made at our iron ore project in Sweden during
the reporting period.
Parys Mountain continues to gain momentum
[image]The Parys Mountain Cu-Zn-Pb-Ag-Au Project on the Isle of Anglesey hosts a
significant polymetallic deposit with an updated resource estimate of 16.1Mt
grading 1.3% Zn, 1.0% Cu, 0.7% Pb, 15g/t Ag and 0.2g/t Au. The site has a head
frame, a 300m deep production shaft, is connected to grid power, located only 20
miles from the port of Holyhead and is well advanced towards permitting for an
operation. We have freehold ownership of the minerals and much of the surface
land on the western portion of the property where all the current resources are
located. Access to infrastructure is good, political risk is low and the project
enjoys the support of local people and government.
An independent Preliminary Economic Assessment (PEA) was completed in January
2021, using the three-year trailing metal prices as of September 2020 -
US$2.81/lb Cu, US$1.20/lb Zn, US$0.95/lb Pb, US$16.67/oz Ag and US$1459/oz Au.
Three separate development cases or scenarios were evaluated as part of the PEA,
utilising planned mine tonnages ranging from 5.5Mt at 1,500tpd, to 11.4Mt at
3,000tpd in an expanded case.
The expanded case produced the most attractive financial returns, indicating a
total cash operating surplus of more than £408 million over a 12-year mine life,
which translated to a pre-tax net present value discounted at 10% of over £96
million with an IRR of 26%.
While the Parys Mountain Project has a long history and a substantial amount of
data, much of this needs to be updated as an integral part of a Pre-Feasibility
Study. The work conducted over the last year, and much of that planned for the
current year, is to bring the data to a sufficient level of confidence to
complete the Pre-Feasibility Study.
Resource update lifts confidence
A series of 10 drill holes for 2,750m were completed early in 2023. These holes
were designed to infill drill both the White Rock and Engine Zones, collectively
referred to as the Morfa Du Zone, and upgrade the resource categories across the
deposits.
After receiving the assay results from the drilling and conducting a robust
review of the geology, the resource interpretation was updated internally
resulting in tighter geological constraints being applied. [A large wooden crate
with logs stacked on top
Description automatically generated with medium confidence]Micon International
Limited were then engaged to complete an independent mineral resource estimate.
The updated mineral resource estimate completed in March 2023 introduced the
first Measured resource to the Parys Mountain mineral inventory. Overall, the
combined Measured and Indicated categories now account for 92%, or 5.3 million
tonnes, of the Morfa Du Zone - including a Measured resource of 1.3 million
tonnes. Prior to the drilling programme, 78% of the Morfa Du Zone was in the
indicated category.
The importance of lifting the resource confidence should not be underestimated.
Advancing the project from the 2021 Preliminary Economic Assessment through a
Pre-Feasibility Study and subsequent Bankable Feasibility Study will require
additional mine design optimisations. The higher confidence category will
ultimately reduce the level of uncertainty through the mine design process.
The updated mineral resource estimate for the Morfa Du Zone comprises 5.72Mt at
0.36% Cu, 2.30% Zn, 1.24% Pb, 28/t Ag and 0.28g/t Au (2.0% CuEq or 5.6% ZnEq),
as set out in the table below. On a like-for-like basis, the previous resource
estimate of the Morfa Du Zone was 6.9Mt at 0.44% Cu, 2.70% Zn, 1.40% Pb, 30g/t
Ag and 0.24g/t Au (2.2% CuEq or 6.2% ZnEq).
+--------------+------+----+----+----+-----+-----+----+-----+----+-----+-----+
|Morfa Du - Mineral Resource Estimate (March 2023) |
+--------------+------+----+----+----+-----+-----+----+-----+----+-----+-----+
| | |Grades |Contained Metal |
+--------------+------+----+----+----+-----+-----+----+-----+----+-----+-----+
|Classification|Tonnes|Cu |Zn |Pb |Ag |Au |Cu |Zn |Pb |Ag |Au |
+--------------+------+----+----+----+-----+-----+----+-----+----+-----+-----+
| |(Mt) |(%) |(%) |(%) |(g/t)|(g/t)|(kt)|(kt) |(kt)|(Moz)|(koz)|
+--------------+------+----+----+----+-----+-----+----+-----+----+-----+-----+
|Measured |1.30 |0.33|2.32|1.28|33 |0.43 |4.3 |30.4 |16.7|1.38 |18.3 |
+--------------+------+----+----+----+-----+-----+----+-----+----+-----+-----+
|Indicated |3.98 |0.37|2.39|1.29|27 |0.23 |14.7|95.3 |51.4|3.44 |29.7 |
+--------------+------+----+----+----+-----+-----+----+-----+----+-----+-----+
|Inferred |0.45 |0.40|1.41|0.65|25 |0.25 |1.8 |6.4 |2.9 |0.36 |3.6 |
+--------------+------+----+----+----+-----+-----+----+-----+----+-----+-----+
|Total |5.72 |0.36|2.30|1.24|28 |0.28 |20.4|131.7|70.9|5.17 |51.3 |
+--------------+------+----+----+----+-----+-----+----+-----+----+-----+-----+
Table 1 - Morfa Du Mineral Resource Estimate (March 2023)
Notes to table:
· Mineral Resources are based on JORC Code definitions
· Operating costs for mining, processing and G&A were modelled at US$45.15/t
of mill feed
· An Average Value operating cut-off of US$45.15/t has been applied
· Payability varies depending on metal (from 70% up to 97.5%)
· Metal prices used in the NSR and CuEq calculations were based on US$3,350/t
for Zn, US$2,292/t for Pb, US$9,523/t for Cu, US$25.50oz for Ag and US$1850/oz
for Au
· Recoveries used in the NSR were based on historical metallurgical testwork
and the 2,000t bulk sample processed in 1991 (80% to 82% for Zn, 48% to 80% for
Cu, 68% to 78% for Pb, 72% for Ag and 25% for Au to concentrate and 40% for Au
to gravity)
· Dilution allowance of 5% included
· CuEq - Copper equivalent was calculated using the formula set out below:
CuEq = (Cu grade % x Cu Recovery) + (Zn grade % x Zn recovery % x (Zn price / Cu
price)) + (Pb grade % x Pb recovery % x (Pb price / Cu price)) + (Ag grade g/t /
31.103 x Ag recovery % x (Ag price / Cu price)) + (Au grade g/t / 31.103 x Au
recovery % x (Au price / Cu price))
· It is the opinion of Anglesey Mining and the Competent Persons that all
elements and products included in the metal equivalent formula have a reasonable
potential to be recovered and sold
· Density values were calculated using a linear regression of density versus
the combined Cu, Pb, and Zn grade
· Rows and columns may not add up exactly due to rounding
The tighter geological constraints removed previous zones of inferred material
that were supported by limited drilling leading to a reduced overall resource
estimate however, it is important to note that these areas still represent key
target zones for future drilling.
The resource estimates for the Northern Copper Zone, Garth Daniel and Deep
Engine Zone were not updated and will be the target for the next round of
resource work.
Technical work streams well advanced - Geotechnical, Metallurgy and Tailings
Management
The 2023 drilling was also designed to provide samples for both geotechnical
domain modelling within the Morfa Du Zone and provide a suitable sample to
complete confirmatory metallurgical test work. From a geotechnical perspective,
the drill holes were surveyed with an acoustic televiewer, a downhole tool that
measures and models all the discontinuities within the surrounding rock. This
data was then confirmed through the geotechnical logging of orientated drill
core. All of this data was then utilised in the geotechnical assessment.
[A close-up of a black and white stone
Description automatically generated]During the reporting period, Knight Piésold,
one of the world's leading geotechnical consultants, completed the geotechnical
assessment of the Morfa Du Zone, which highlighted that the assumptions used in
the 2021 Preliminary Economic Assessment were appropriate for the selected
stoping method and confirmed the potential mining spans. This data will feed
into the next round of underground designs and optimisation process.
Subsequent to the geological and geotechnical logging of the drill core, we
dispatched a 340 kg sample to our retained mineral processing consultancy firm,
Grinding Solutions Limited ("GSL"), comprising a blend of White Rock and Engine
Zone with a combined head-grade of 0.42% Cu, 3.60% Zn, 3.08% Pb, 49g/t Ag and
0.7g/t Au (3.4% CuEq). The blend as delivered to GSL is 3.3 (White Rock) to 1.0
(Engine Zone), similar to the contribution that is expected to be delivered from
the mine in the early years, prior to production from the Northern Copper Zone
commencing.
The metallurgical testwork is designed to update results from testwork conducted
in 2007, which demonstrated that Dense Media Separation (DMS) would upgrade the
feed into the comminution circuit with a mass rejection of around 40% and
between 3 and 5% associated metal losses. The current round of testwork will
also complete a trade-off study between DMS and X-Ray based ore-sorting
technology which is now utilised across many mines around the globe.
If the Parys Mountain ore is suitable for pre-concentrating, the benefits will
be significant. Should the testwork confirm the previous 40% mass rejection and
associated metal losses, the designed milling rate could be significantly
smaller than the mining rate with the rejects going back underground to be used
as road base for the decline or stope-fill. Additionally, the 40% mass rejection
would significantly reduce the amount of mine tailings. Both benefits would also
lower the capital requirements of mine development. Ultimately, the decision on
whether to include a pre-concentration process or not will be decided through
economic trade-off analyses during the Pre-Feasibility Study.
Knight Piésold also completed the conceptual design of a dry stack tailings
management facility. The historical planning permissions for Parys Mountain
assumed a conventional tailings slurry storage. However, the preferred method
would now be a dry stack tailings management facility, which is aligned with the
recommendations from the Global Industry Standard on Tailings Management.
To integrate the filtered stack facility with the valley to the south of the
mine, the stack has been designed in 10 m lifts and modelled against existing
slopes at the north. Under the expanded case development proposal, the filtered
stack facility would require a capacity of 6.5 million tonnes over the proposed
12-year mine life, while also protecting a Special Site of Scientific Interest,
related to a lichenological interest, located nearby.
The conceptual configuration, size and cross-section of the tailings area are
presented below.
[A picture containing screenshot, plot, line, map
Description automatically generated]Figure 1 - Conceptual design for filtered,
dry stack tailings management facility
Environmental assessment and permitting
The permitting process has changed significantly since 1988. While we have
existing planning permissions that relate to the proposed development of the
mine, processing plant and tailings storage facility, these need to be updated
to meet today's more stringent requirements.
[A stone tower in a landscape
Description automatically generated]
Environmental and permitting activities have continued at Parys Mountain over
the course of the period.
Up to the end of March 2023 the following surveys had been completed:
· Habitat mapping and Habitat suitability
· Pond water testing
· Over-wintering and nesting birds
· Reptiles and great crested newts
· Invertebrates (aquatic and terrestrial)
· Soils and agricultural land quality
Work has also commenced on the following surveys:
· Groundwater testing, which will feed directly into both the infrastructure
foundation designs and the dry-stack tailings engineering studies
· Air quality, including noise and vibration surveys
· Landscape and
· Heritage
As a former operating mine, the project is classified as a Dormant Site, which
requires a Pre-Application Inquiry submission to the North Wales Mineral
Planning Authority. This Pre-Application Inquiry was submitted in 2022. A Pre
-Application Inquiry meeting with the Mineral Planning Authority and a number of
statutory consultees was held on site and in Amlwch in April 2023. The attendees
included Natural Resources Wales, Cadw, Anglesey County Council Departments
(Environmental Health, Highways & Transportation, Ecology & Environment and
Heritage), Archaeological Planning Services, local councillors and members of
both Westminster and Welsh governments.
The planning process allows for the statutory consultees to respond to the
proposal with any comments or queries regarding the project details. A number of
responses have now been received and will be used to define the limits of the
Environmental Impact and Social Assessment for Parys Mountain.
Bringing the Northern Copper Zone into play
The design, planning and logistics for the first round of infill drilling into
the Northern Copper Zone since 1974 has now been completed.
The NCZ was discovered in 1962 after testing an Induced Polarisation geophysical
target. The zone is interpreted as the downdip extension of the historical open
pit mined at Parys Mountain and appears as a wedge-shaped block with the thin
edge (15m wide) starting around 200m below surface that extends down to the
thicker end (over 100m width) at a depth of around 525m below surface. It
remains open both along strike to the east and at depth. The locations of the
historical drilling intersections are shown below:
[A picture containing diagram, text, map
Description automatically generated]Figure 2 - Existing intersections within the
Northern Copper Zone and Garth Daniel (long section)
The Northern Copper Zone has a 2012 resource estimate of 9.4Mt at 1.27% Cu, plus
minor Au, Ag, Zn and Pb credits (1.6% CuEq) - although very few holes were
assayed for all the metals. The internal resource estimate from the early 1970's
was >30Mt at 0.81% Cu - excluding any by-products - which should not be
considered compliant with any modern JORC or CIMM methodologies or NI43-101
reporting requirements.
While very few of the holes drilled before 1980 were assayed for gold, it was
recognised that the Northern Copper Zone contains gold with minor silver, zinc
and lead. Preliminary metallurgical testwork completed in 1969 at Lakefield
Research in Ontario demonstrated recoveries of up to 93.3% producing a copper
concentrate grading 23.2% Cu - but no testing was conducted on the recovery of
any other metals.
The proposed drilling programme of 6 holes, for 3,750m, could potentially
provide multiple pierce points across the Northern Copper Zone, the Garth Daniel
Zone and the Central Zone, based on current interpretations. Examples of
historical intersections from these zones are detailed in the tables below.
Historical Historical
High-grade Lower-grade
Intersections Intersections
Hole ID Depth Width Grade Hole ID Depth Width Grade
(m) (m) CuEq ZnEq (m) (m) CuEq ZnEq
(%) (%) (%) (%)
AMC15 562.7 5.2 13.5 37.4 H34 349.9 146.3 1.2 3.3
A29 351.9 3.8 8.6 24.0 H30 297.6 80.9 1.5 4.3
AMC17 397.7 11.4 5.9 16.5 AMC19 313.4 13.6 2.4 6.6
A53 561.8 4.8 5.4 15.2 H31 398.7 50.9 1.2 3.3
H3 284.7 1.8 11.7 32.3 H17A 419.4 87.0 0.9 2.5
Table 2 - Historical drilling intersections - high-grade intersections from
Garth Daniel and Central Zone, lower grade intersections from Northern Copper
Zone.
Lifting the resource confidence category for the Northern Copper Zone, which is
currently all in the Inferred category, is a key target over the next year. The
Northern Copper Zone is projected to contribute almost 40% of the mill feed over
the 12-year mine life as proposed by the expanded case in the 2021 Preliminary
Economic Assessment.
Base metal prices soften, but fundamentals remain supportive
It is now well understood that the energy transition currently underway will
significantly increase demand for metals used in the manufacturing of electric
vehicles (EVs) and renewable power generation facilities. Ultimately, this will
require a vast supply response over the next two decades and a step change in
investments from miners. However, mining projects have long lead times and
require large investments. Based on data from the International Energy Agency
(IEA), lead times from resource discovery to production now averages 17-years,
which includes 12.5-years from discovery to feasibility and 4.5 years for
planning and construction, which is likely to have a significant impact on the
timing of any supply response. In addition, some established, well-funded mining
companies have recently demonstrated a preference to `buy-versus-build', which
potentially implies there are limited development options around.
Both EVs and renewable generation are more metal-intensive than fossil fuel
-based alternatives, which will continue to support metals demand as the world
transitions towards a carbon-free economy. According to the International Bar
Association, wind and solar installations require between 8 and 12 times more
copper than coal and gas generation capacity and EVs require 3 to 4 times more
of the base metal than internal combustion engine vehicles.
The IEA suggests this transition will lead to a six-fold increase in demand for
minerals by 2050 compared to current levels. While the growth rates for each
metal will vary and will depend on technologies chosen for batteries and power
generation and environmental policies, the underlying direction of travel for
the industry has been set. We continue to remain very confident that the outlook
for most minerals, particularly for the copper and zinc minerals at Parys
Mountain, is very encouraging.
Base metal prices were generally weaker throughout the course of the reporting
period. While copper and lead were around 13% lower year-on-year, zinc fell
almost 35%. The highs for most of the base metals complex were seen in April
2022. Over the same time frame, precious metals were flat. The entire commodity
suite saw lows for the year in September 2022, bought on by underlying financial
and economic indicators pointing to an extended period of weakness across all
major geographies and a pending recession. Consumer confidence in China and the
United States declined rapidly and purchasing managers indices for construction
and manufacturing all pointed to a drop in future orders.
The base case economic model in the PEA utilized three-year trailing metal
prices of $2.81/lb copper, $1.20/lb zinc, $0.95/lb lead, $16.67/oz silver, and
$1,459/oz gold, with an exchange rate of £1.00/$1.25. We continue to believe
that the base case three-year trailing metal prices used in the PEA are a very
conservative starting point. The three-year trailing metal prices to the end of
2022 were US$3.67/lb copper (31% above the price used in the 2021 PEA),
US$1.32/lb Zn (+10%), US$0.93/lb lead (-2%), US$22.57/oz silver (+35%) and
US$1790/oz gold (23%) with an exchange rate of £1.00/US$1.30 (+4%).
Prices at 14 September 2023, the last practicable date before the publication of
this report, were $3.78/lb copper, $1.16/lb zinc, $1.02/lb lead, $22.63/oz
silver and $1908/oz gold, with the exchange rate at £1.00/$1.24. Using these
commodity prices, the expanded case pre-tax NPV10% increases from US$120 million
to US$228 million, with pre-tax IRR of 36%, which clearly demonstrate the
sensitivity and leverage of a mine at Parys Mountain to higher metal prices.
At these September 2023 metal prices, copper production from a Parys Mountain
mine would represent 50% of the net smelter revenue under the expanded case
while zinc and lead would represent 27% and 18% respectively. The PEA indicates
production of 75,000 tonnes of copper, 166,000 tonnes of zinc, 80,000 tonnes of
lead, over 5 million ounces of silver and 30,000 ounces of gold over the
project's 12-year mine life, this equates to an average copper equivalent
production rate of 14,000 tonnes per year over the proposed life of the
operation.
Grängesberg iron ore - a strategic iron ore asset in Europe
On 9 February 2023 the group acquired a further 29.8% of the share capital of
Grängesberg Iron AB (GIAB) - the company that owns the Grängesberg Iron Ore
Project, thereby increasing its holding in GIAB to 49.7%. This was effected
through the purchase of a 29.8% stake in GIAB from Roslagen Resources AB
("Roslagen") and the assignment to Anglesey of 40% of the outstanding
subordinated debt (nominal value £335,000) owed to Roslagen by GIAB for a total
consideration of £525,000, satisfied by a cash payment of £87,000 and the issue
to Roslagen of 14,544,827 ordinary shares of Anglesey at a price of 3.0 pence
per share to be held in escrow for twelve months from the date of issue. See
Note 14 to financial statements.
In addition to the 49.7% holding, Anglesey also has management rights of GIAB
and a reciprocal right of first refusal over the remaining 50.3%.
The Grängesberg project, located about 200 kilometres north-west of Stockholm,
is a substantial iron ore asset located in a very favourable jurisdiction. Prior
to its closure in 1989, due to then prevailing market conditions, the mine had
produced around 180 million tonnes of iron ore.
[A large building with a large tower in the middle of a forest
Description automatically generated]
In late 2021, we commissioned an updated Pre-Feasibility Study on the
development of the Grängesberg project, which was completed in July 2022. The
study demonstrated a very robust project with production of 2.3 - 2.5 million
tonnes per annum of iron ore concentrate grading 70% Fe over an initial 16-year
life, generating strong economic returns, including a NPV8% of US$688 million
post-tax. The study assumed an iron ore price of US$120/t (62% Fe benchmark, CFR
China) with sensitivities indicating a long-term price of US$80/t required to
achieve a positive return at a discount rate of 8%.
The study confirmed the previous probable ore reserve estimate of 82.4 million
tonnes, which would support the proposed 16-year mine life at a throughput of
5.3 million tonnes per annum for production of between 2.3 and 2.5 million
tonnes per annum of 70% Fe concentrate.
Micon concluded that the Grängesberg Project demonstrates an economically viable
project using the stated price assumptions, cost estimates and technical
parameters generated by the PFS, with the sensitivity analysis indicating
positive returns can be achieved even with using a 30% lower underlying iron ore
price.
+------------------------------------------+----------+----------------+
|Key Metric |Unit |2022 Updated PFS|
+------------------------------------------+----------+----------------+
|Ore to Mill |Mt |82.3 |
+------------------------------------------+----------+----------------+
|Life of Mine |Years |16.0 |
+------------------------------------------+----------+----------------+
|Contained Fe |Mt |30.6 |
+------------------------------------------+----------+----------------+
|Recovery |% |85 |
+------------------------------------------+----------+----------------+
|Recovered Fe |Mt |26.0 |
+------------------------------------------+----------+----------------+
|Outgoing Concentrate |Mt |37.2 |
+------------------------------------------+----------+----------------+
|Concentrate Grade |% Fe |70 |
+------------------------------------------+----------+----------------+
|Average Annual Concentrate Output |Mt |2.3 |
+------------------------------------------+----------+----------------+
|Cash Cost * |US$/t Conc|53.60 |
+------------------------------------------+----------+----------------+
|All-in Sustaining Cost ** |US$/t Conc|57.80 |
+------------------------------------------+----------+----------------+
|Pre-production Capital |US$m |399 |
+------------------------------------------+----------+----------------+
|Post-tax NPV8% |US$m |688 |
+------------------------------------------+----------+----------------+
|Post-tax Internal Rate of Return |% |26 |
+------------------------------------------+----------+----------------+
|Project Payback |Years |3.6 |
+------------------------------------------+----------+----------------+
|Average Annual Post-tax Operating Cashflow|US$m |130 |
+------------------------------------------+----------+----------------+
Table 3 - Key financial metrics from the updated 2022 PFS
* Cash costs are inclusive of mining costs, processing costs, site G&A,
transportation charges to port and royalties
** All-in Sustaining Cost includes cash costs plus sustaining capital and
closure cost
*** Post-tax Operating Cashflow based on iron ore price forecast of US$120/t
China CFR 62% Fe benchmark
In early 2023, a Memorandum of Understanding (MOU) was signed with Mine Storage
International to investigate the potential for Grängesberg to be converted into
a Pumped Hydro-Storage project at the end of the mine's producing life.
Pumped-Hydro Storage is a green-energy storage solution that utilises water and
gravity to store electrical energy. An underground mine can provide a closed
-loop solution using proven, pumped hydro-power technology. Essentially, the
system involves water being gravity fed through pipes down a shaft into the
turbines, which produce electricity for supply to the grid and also pump the
water back to surface. The mine storage system has a high round-trip efficiency
of 75-85% and proven durability.
The MoU with Mine Storage could lead to numerous future benefits including:
· A potential long-term revenue stream from the Grängesberg Mine to enhance
the cashflow
· Enabling the Circular Economy with existing technology turning a depleted
mine into a power storage asset ensuring generational benefits
· A well credentialled Swedish partner and potential exposure to Scandinavian
investors
The next stage of work for the Grängesberg project is the commencement of
environmental baseline surveys to feed into an Environmental Impact and Social
Assessment, which is a requirement to getting both the environmental permits and
development consent. Grängesberg has the potential to be restarted as one of
Europe's largest individual producers of iron ore concentrates. When combined
with the high-grade nature of the concentrate and proximity to European steel
mills, the asset clearly demonstrates highly strategic positioning.
Iron Ore - Grade is King
Demonstrating some similarities with the previous year, the price of iron ore
exhibited significant volatility over the course of the year. During the first
half of 2022, iron ore prices displayed upward momentum buoyed by the potential
for Chinese construction activity to increase after the initial Covid
restrictions were lifted, China accounts for about two-thirds of seaborne iron
ore demand. However, the second part of the year told a different story for iron
ore, which saw prices cut by almost 50% by October. The weakness was driven by
renewed worries over COVID-19 restrictions in China, plus concerns over the
country's property sector and cooling global economic growth.
Iron ore prices averaged US$121 per tonne (62% Fe CFR delivered to China) in
2022, down from an average of US$162 per tonne in 2021.
A report from the Institute for Energy Economics and Financial Analysis (IEEFA)
highlights that decarbonising the steel industry will require a significant lift
in both high-grade iron ore production and improved beneficiation techniques. To
reach a targeted net zero emissions by 2050, global steelmakers must switch
production methods from blast furnaces that consume coal to green hydrogen-based
direct reduced iron (DRI) processes. However, DRI technology is based on
Electric Arc Furnaces (EAFs) and requires a higher grade of iron ore than blast
furnaces - typically at least 67%.
DRI-based production of steel emits less carbon dioxide than the traditional
blast furnaces and enables the production of high-quality products in the EAF.
High-quality products require the highest quality of steel scrap; but if scrap
is limited, the use of DRI is necessary to guarantee specific qualities. The
board continues to believe that demand for high-grade Fe concentrate will
continue to rise, which could potentially support the development of the
Grängesberg Iron Ore Project.
The opportunity is now to advance the Grängesberg project through to a Financial
Investment Decision. This could be completed along with securing a strategic
investor, offtake partner, separate listing, or a combination of these options.
Labrador Iron Mines
Labrador Iron Mines Holdings Limited (LIM), in which we hold a 12% interest,
continues to progress plans to develop its Houston Project in the Labrador
trough. LIM published a PEA on its Houston Project in February 2021 which
supports its plan to resume iron ore production and demonstrated an initial 12
-year mine life with production of 2 million dmt of per year, for total
production of 23.4 million dmt of product at 62.2% Fe over the life of the
Houston mine.
The PEA estimates the Houston Project will generate an undiscounted net cash
flow of CAD$234 million and an after-tax net present value at an 8% discount
rate of CAD$109 million, and an after-tax internal rate of return of 39%, under
the base case $90/dmt benchmark pricing model. The PEA notes that using a spot
price of $160/dmt would increase the after-tax NPV8% to CAD$459 million and the
after-tax IRR to 209%.
Anglesey holds 19.29 million LIM shares which on 31 March 2023 were valued in
total at $1.7 million, or approximately £1.4 million (2022 - £1.9 million) on
the OTC Market in the United States. This value had not changed significantly at
22 September 2023.
Financial results and position
There are no revenues from the operation of the properties.
The loss before other comprehensive income for the year ended 31 March 2023
after tax was £961,288 compared to a loss of £693,242 in the 2022 fiscal year.
The administrative and other costs excluding investment income and finance
charges were £696,545 compared to £528,045 in the previous year. This increase
is due to additional expenses in relation to Grängesberg including the
administrative expenses in connection with the acquisition of an increased
shareholding this year and feasibility study costs.
The value of the group's holding in LIM is reported in other comprehensive
income and effectively is based on its share price. This year there is a loss of
£0.5 million as the share price declined. The outcome is a total comprehensive
loss for the year of £1,462,670, compared to a loss of £2,826,957 in the
previous year.
During the year there were no additions to fixed assets (2022 - nil) and
£460,118 (2022 - £394,410) was capitalised in respect of the Parys Mountain
property as mineral property exploration and evaluation, as the programme of
geological and environmental work as well as drilling continued as described in
this Strategic report.
At 31 March 2023 the mineral property exploration and evaluation assets had a
carrying value of £16.2 (2022 - £15.7) million. These carrying values are
supported by the results of the 2021 Preliminary Economic Assessment of the
Parys Mountain project.
At the reporting date, as detailed in note 10, the directors considered the
carrying value of the Parys Mountain exploration and evaluation assets to
determine whether specific facts and circumstances suggest there is any
indication of impairment. They carefully considered the positive results of the
resource update completed in March 2023, the independent PEA and the plans for
moving the project forward. Consequently, the directors concluded that there
were no facts and circumstances which materially changed during the year which
might trigger an impairment review and that there are no indicators of
impairment.
On 17 May 2022 a placing to institutional investors for cash of 22,829,705
shares at 3.4 pence per share raising £864,416 gross was completed. These funds
will be used for ongoing work on the Parys Mountain project, as well as for
general corporate purposes.
Also in May 2022 a new Investor Agreement was concluded with Juno Limited to
replace the controlling shareholder and consolidated working capital agreements.
In the new Investor Agreement Juno agreed to participate in any future equity
financing, at the same price per share and on the same terms as the arm's-length
participants, to maintain its percentage, with the subscription price to be
satisfied by the conversion and consequent reduction of debt, and the company
agreed to pay Juno in cash ten percent of the net proceeds of any such equity
financing in further reduction of the debt. The interest rate on the outstanding
debt was reduced from 10% to 5% p.a. from 1 April 2022. In addition, Juno was
granted certain nomination and reporting rights, including the right to nominate
two directors to the board, so long as Juno holds at least 20% of the company's
outstanding shares and one director so long as Juno holds at least 10% of the
company's outstanding shares. This renegotiation was approved by an independent
board committee responsible for reviewing and approving any transactions and
potential transactions with Juno. The family interests of Danesh Varma have a
significant shareholding in Juno.
The net effect of the new agreement with the May 2022 financing was that the
debt due to Juno was reduced by £305,499, of which £78,345 was paid in cash and
the balance by conversion of debt.
The cash balance at 31 March 2023 was £247,134, compared to £922,177 at 31 March
2022.
At 31 March 2023 there were 295,220,548 ordinary shares in issue (2022 -
248,070,732), the increase being due to the financing events referred to above.
At 12 September 2023 there were 420,093,017 ordinary shares in issue.
Subsequent to the year-end two placings of equity were completed raising £1.5
million gross. See note 29.
Performance
The Group holds interests in exploration and evaluation properties and, until a
mine is placed into production, there are no standardised performance indicators
which can usefully be employed to gauge performance. The publication of the
independent PEA on the Parys Mountain project in January 2021, which built upon
the optimisation studies successfully completed over the previous two years, and
included a new expanded mineral resource estimate, with a financial model for an
expanded case at 3,000 tpd which indicated a pre-tax NPV10% of US$120 million
and a 26% IRR, demonstrated a significant improvement on previous studies and
steady progress.
The updated mineral resource estimate for the Morfa Du Zone completed in 2023
has increased the confidence in the geological model, which underpins the PEA.
Additionally, several other technical reports have been completed over the last
year that support the findings from the PEA. These include the geotechnical
assessment of the underground area, the proposed dry stack tailings design and
numerous environmental baseline surveys.
The completion of the independent updated PFS on the Grängesberg project
demonstrates a very robust project with production of 2.3 - 2.5Mtpa of iron ore
concentrate grading 70% Fe over an initial 16-year life, generating strong
economic returns, including a NPV8% of US$688 million post-tax using the stated
price assumptions, cost estimates and technical parameters.
The external factors affecting the ability of the Group to move its projects
forward are primarily the demand for metals and minerals, levels of metal
prices, and the market sentiment for investment in mining and mineral
exploration companies. These are discussed above, and risks and uncertainties
are dealt with below.
Other activities
The Directors continue to review new properties suitable for advanced
exploration or development that would be complementary to or provide synergies
with the existing projects and would be within the financing capability likely
to be available. A number of base metals projects have been identified as
potentially attractive and further early-stage opportunities continue to be
evaluated.
Environmental and Social Focus
The purpose and objective of Anglesey Mining is to create value for shareholders
in an environmentally, socially, and ethically responsible manner which is also
to the benefit of all stakeholders. Our current principal activity is to achieve
this by developing, building and operating a producing mine at Parys Mountain
and to progress the Grängesberg Iron Ore project in Sweden through to a decision
to mine.
There has been an increasing investor focus on ESG matters. These are areas on
which we have always placed high importance, although we have not attempted
quantitative measurements, particularly as having the social licence to operate,
and operating in an environmentally responsible manner, are critical for the
successful operation of any mining project. In Anglesey Mining we place a high
priority on sustainability, and on environmental, social and governance (ESG)
matters, and we are committed to being a responsible mining company, maintaining
mutually beneficial long-term relationships with key stakeholders and the local
community. Readers are invited to refer to the report on Corporate Governance.
The Directors, both individually and collectively, believe, in good faith, that
throughout the year and at every meeting of the Board and management when making
every key decision, they have acted to promote the success of the Group for the
benefit of its members as a whole, as required by Section 172 of the Companies
Act 2006, having regard to the stakeholders and matters set out in section
172(1) of the Companies Act 2006. The Directors' Section 172 Statement follows.
Section 172 of the Companies Act is contained in the part of the Act which
defines the duties of a director and concerns the "duty to promote the success
of the Company". Section 172 adopts an `enlightened shareholder value' approach
to the statutory duties of a company director, so that a director, in fulfilling
his duty to promote the success of the company must act in the way he considers,
in good faith, would be most likely to promote the success of the Company for
the benefit of its members as a whole, and in doing so have regard to other
specified factors insofar as they promote the Company's interests.
The Board of Anglesey Mining recognises its legal duty to act in good faith and
to promote the success of the Company for the benefit of its shareholders and
with regard to the interests of stakeholders as a whole and having regard to
other matters set out in Section 172. These include the likely consequences in
the long term of any decisions made; the interest of any employees; the need to
foster relationships with all stakeholders; the impact future operations may
have on the environment and local communities; the desire to maintain a
reputation for high standards of business conduct and the need to act fairly
between members of the Company.
The Board recognises the importance of open and transparent communication with
shareholders and with all stakeholders, including landowners, communities, and
regional and national authorities. We seek to maximise the operation's benefits
to local communities, while minimising negative impacts to effectively manage
issues of concern to society. Shareholders have the opportunity to discuss
issues and provide feedback at any time.
The application of the Section 172 requirements can be demonstrated in relation
to the Group's operations and activities during the past year as follows.
Having regard to the likely consequences of any decision in the long term
The Group's purpose and vision are set out in the Chairman's Letter and in this
Strategic Report. The Board oversees strategy and is committed to the long-term
goal of the development of the Parys Mountain Project. The activities towards
that goal are described and discussed in the Strategic Report. The Board remains
mindful that its strategic decisions have long-term implications for the Parys
Mountain project, and these implications are carefully assessed.
In evaluating alternatives or opportunities the likely consequences of any
decision in the long-term are always considered, together with the potential
impact on long-term shareholder value, including key competitive trends, supply
and demand of metals, potential impact on the environment and climate change
considerations, all of which were considered in the preparation of the PEA and
in the past year in the design of the proposed drystacked tailings management
facility.
Having regard to the need to foster business relationships with others
This is a mineral exploration and development business, without any regular
income and is entirely dependent upon new investment from the financial markets
for its continued operation. The benefits of maintaining strong relationships
with key partners, contractors and consultants are valued. This is discussed in
more detail elsewhere in the annual report. As a mine development company, the
we understand that a range of third parties - regulators, contractors, suppliers
and potential customers for the concentrates that would be produced from a mine
at Parys Mountain are relevant to the sustainability of the business.
Having regard to the interests of the employees
The Group currently has two full-time and one part-time employee and is managed
by its directors and a small number of associates and sub-contract staff. All
suggestions together with the views and interests of employees are considered in
all decision-making.
Having regard to the desirability of maintaining a reputation for high standards
of business conduct
The Board is committed to high standards of corporate governance, integrity, and
social responsibility and to managing our affairs in an honest and ethical
manner, as further discussed in the Corporate Governance Report. We strive to
apply ethical business practices and to conduct business in a responsible and
transparent manner with the goal of ensuring that Anglesey Mining plc maintains
a reputation for high standards of business conduct and good governance.
Having regard to the impact of operations on the community and the environment
A broad range of stakeholder considerations are taken into account when making
decisions and careful consideration is given to any potential impacts on the
local community and the environment. We strive to maintain good relations with
the local community, especially with local businesses in North Wales. For
example, in connection with its plans for the advancement of Parys Mountain,
discussions and consultations have been held with the North Wales Minerals and
Waste Planning Service and with local Councils. In connection with the Pre
-Application Inquiry submission to the North Wales Mineral Planning Authority a
meeting with the Mineral Planning Authority and a number of statutory consultees
was held on site and in Amlwch in April 2023. The attendees included Natural
Resources Wales, Cadw, Anglesey County Council Departments (Environmental
Health, Highways & Transportation, Ecology & Environment and Heritage),
Archaeological Planning Services, local councillors and members of both
Westminster and Welsh governments.
The Corporate Governance Report discusses how the Directors engage with and have
had regard to the community in which we operate. Further discussion of these
activities can be found in this Strategic Report.
As a mine development company, the Board understands that recognising and having
regard to the potential impact our operations may have on the community and the
environment, is essential to underpinning the social licence necessary to
operate. In making decisions about the development of a mine at Parys Mountain,
we seek to maximise the benefits to the local community, while minimising
negative impacts, and to effectively manage issues of concern to society. By
aligning future operations to environmental, social and governance performance
the Group will seek to deliver on its purpose to create value through
responsible and sustainable mining.
Having regard to the need to act fairly as between members of the Company
The Company has only one class of share in issue and all shareholders benefit
from the same rights, as set out in the Articles of Association and as required
by the Companies Act 2006. Since 1996 agreements have been in place with Juno
Limited, the largest shareholder, which provide that Anglesey will maintain an
independent board and that any transactions between Juno and Anglesey will be at
an arm's length basis. Effective 31 March 2022, as a further step to strengthen
its financial position and reduce debt, Anglesey entered into a new Investor
Agreement with Juno Limited, to amend and replace the Controlling Shareholder
Agreement and the Consolidated Working Capital Agreement. This renegotiation was
approved by an independent board committee responsible for reviewing and
approving any transactions and potential transactions with Juno.
The Board recognises its legal and regulatory duties and does not take any
decisions or actions, such as selectively disclosing confidential or inside
information, that would provide any shareholder with any unfair advantage or
position compared to the shareholders as a whole.
Risks and uncertainties
The Directors have carried out an assessment of the principal risks facing the
Group, including those that would threaten its business model, future
performance, solvency or liquidity. In conducting its business, the Group faces
a number of risks and uncertainties, the more significant of which are described
below. The board believes the principal risks are adequately disclosed in this
annual report and that there are no other risks of comparable magnitude which
need to be disclosed.
Mineral exploration and mine development is a high-risk, speculative business
and the ultimate success of Anglesey Mining will be dependent on the successful
development of a mine at Parys Mountain, which is subject to numerous
significant risks, most of which are outside the control of the Board.
In reviewing the risks facing the Group, the members of the Board consider they
are sufficiently close to operations and aware of activities to be able to
adequately monitor risk without the establishment of any formal process. There
may be risks against which it cannot insure or against which it may elect not to
insure because of high premium costs or other reasons. However, there are also
risks and uncertainties of a nature common to all mineral projects and these are
summarised below.
General mining risks
Actual results relating to, amongst other things, results of exploration,
mineral resources, mineral reserves, capital costs, mining production costs and
reclamation and post closure costs, could differ materially from those currently
anticipated by reason of factors such as changes in expected geological or
geotechnical structures, general economic conditions and conditions in the
financial markets, changes in demand and prices for minerals that are expected
to be produced, legislative, environmental and other judicial, regulatory,
political and competitive developments in areas in which the Group operates,
technological and operational difficulties encountered in connection with
activities, labour relations, costs and changing foreign exchange rates and
other matters.
The mining industry is competitive in all of its phases. There is competition
within the mining industry for the discovery and acquisition of properties
considered to have commercial potential. We face competition from other mining
companies in connection with the acquisition of properties, mineral claims,
leases and other mineral interests as well as for the recruitment and retention
of qualified employees and other personnel and in attracting investment and or
potential joint venture partners to our properties.
Exploration and development
Exploration for minerals and development of mining operations involve risks,
many of which are outside our control. Exploration by its nature is subject to
uncertainties and unforeseen or unwanted results are always possible.
Mineral exploration and development is a speculative business, characterized by
a number of significant risks including, among other things, unprofitable
efforts resulting not only from the failure to discover mineral deposits but
also from finding mineral deposits that, though present, are insufficient in
quantity and quality to return a profit from production.
Substantial expenditures are required to develop the mining and processing
facilities and infrastructure at any mine site. No assurance can be given that a
mineral deposit can be developed to justify commercial operations or that funds
required for development can be obtained on a timely basis and at an acceptable
cost. There can be no assurance that the Group's current development programmes
will result in profitable mining operations. Current operations are in
politically stable environments and hence unlikely to be subject to
expropriation but exploration by its nature is subject to uncertainties and
unforeseen or unwanted results are always possible.
Financing and liquidity risk
The Group has relied on equity financing to fund its working capital
requirements and will need to generate additional financial resources to fund
all future planned exploration and development programmes. Developing the Parys
Mountain project will be dependent on raising further funds from various
sources. There is no assurance that such additional financial resources and/or
positive cash flows or profitability will be forthcoming.
There can be no assurance that we will be successful in obtaining any additional
required funding necessary to conduct operations on our properties. Failure to
obtain additional financing on a timely basis could cause planned activities and
programs to be delayed.
If additional financing is raised through the issuance of equity or convertible
debt securities, the interests of shareholders in the net assets of the Group
may be diluted.
Metal prices
The prices of metals fluctuate widely and are affected by many factors outside
our control. The relative prices of metals and future expectations for such
prices have a significant impact on the market sentiment for investment in
mining and mineral exploration companies. Metal prices are usually expressed and
traded in US dollars and any fluctuations may be either exacerbated or mitigated
by currency fluctuations which affect the revenue which might be received in
sterling.
Foreign exchange
LIM is a Canadian company; Angmag AB and GIAB are Swedish companies.
Accordingly, the value of the holdings in these companies is affected by
exchange rate risks. Operations at Parys Mountain are in the UK and exchange
rate risks are minor. Most of the cash balance at the year-end was held in
sterling.
Permitting, environment, climate change and social
Operations are subject to environmental legislation and regulations which are
evolving in pursuit of national climate change objectives and in a manner where
standards are becoming more stringent. Mineral extraction and processing can
have significant environmental impacts. Mining operations require approval of
environmental impact assessments and obtaining planning permissions. We hold
planning permissions for the development of the Parys Mountain property, but
further environmental studies and assessments and various approvals and consents
will be required to carry out proposed activities and these may be subject to
various operational conditions and reclamation requirements.
There can be no assurance that all permits, licences, permissions and approvals
that may be required for our activities will be obtainable on reasonable terms
or on a timely basis.
Employees and personnel
We are dependent on the services of a small number of key executives,
specifically the chairman, chief executive and finance director. The loss of
these persons or the inability to attract and retain additional highly skilled
and experienced employees for any areas which might be undertaken in the future
may adversely affect those businesses or operations. A discussion on the
composition and assessment of the Board of Directors is included in the Report
on Corporate Governance.
Group Prospects
Recognition of potential opportunities
The recommencement of activities at Parys Mountain is the first stage of
bringing the asset back into the focus of mainstream investors, both retail and
institutional. The economics of the project under the current commodity pricing
environment make the progression of Parys Mountain through to a financial
investment decision an obvious milestone.
Development of a new mine at Parys Mountain, producing copper, zinc and lead
with gold and silver credits, can deliver economic growth in the UK, regional
jobs for the community and business opportunities for local service providers.
Importantly, these critical and strategic metals, essential for the
decarbonisation of the economy, are primarily imported into the UK currently.
This creates a unique and timely opportunity, both for Anglesey Mining and for
the UK, to develop a new, modern, mine at Parys Mountain in an environmentally
sustainable manner.
A similar view can be held for the Grängesberg Iron Ore Project, where with the
Pre-Feasibility Study update now complete, we have a clear view on the
requirements to enable us to advance through to the Feasibility stage. When
combined with the Labrador Mines assets, Anglesey Mining has a very valuable and
strategic set of iron ore assets that should be progressed with the greatest
speed possible, but within the constraints of the resources available.
Outlook
The potential for a mine development at Parys Mountain remains very strong with
results from work programmes over the last year supporting the outcomes from the
2021 PEA. Therefore, we will continue to advance the project through additional
programmes to enable the commencement of a detailed Pre-Feasibility Study.
The work programmes approved by the Board for the current year include the
following:
· Commence infill drilling of the Northern Copper Zone to improve the resource
confidence categories
· Update the Northern Copper Zone mineral resource estimate
· Complete the metallurgical testwork for the Morfa Du Zone, including the
trade-off study between DMS and XRT pre-concentration methods
· Continue with the environmental and permitting activities
Other work streams to be factored in at Parys Mountain throughout the year
include:
· Re-optimise the underground development with initial focus on the Morfa Du
Zone;
· Include results of ongoing metallurgical testwork into the preliminary
engineering designs, with a particular focus on selecting the preferred pre
-concentration method;
· Preliminary engineering designs for the proposed dry-stack tailings
management facility;
· Preliminary engineering designs for the process plant; and,
· Updating the site infrastructure plans including decline portal location,
temporary mining waste storage location and supply of utilities.
All of these activities are required to enable the Parys Mountain copper-zinc
-lead-silver-gold project to move from the PEA to a full committed decision to
proceed to production. As has been said before, these steps do take some time to
reach fruition and are key requirements to securing the necessary finance to
move the project towards production.
At Grängesberg, the Pre-feasibility Study Update has provided a series of
recommendations to progress the project through to the commencement of a
Feasibility Study. The initial work programmes include the following:
· Commencement of the environmental baseline surveys;
· Updating the resource estimate to include domaining of the apatite zones
that could produce a valuable by-product stream; and,
· Updating the reserve estimate to incorporate the proposed alternative mining
method (sub-level open stoping with back fill instead of sublevel caving), which
would reduce the risk of any potential movement on the Export Fault zone.
At a general corporate level, the board will continue to review other
opportunities within the global metals and mining sector.
At the end of March 2023, the group had cash resources of £247,134 and at 12
September 2023 cash resources of £985,413. Subsequent to the year-end two
placings of equity were completed raising £1.5 million. See note 29.
This report was approved by the board of directors on 22 September 2023 and
signed on its behalf by:
Jo Battershill
Chief Executive
LEI: 213800X8BO8EK2B4HQ71
For further information, please contact:
Anglesey Mining plc
Jo Battershill, Chief Executive - Tel: +44 (0)7540 366000
John Kearney, Chairman - Tel: +1 416 362 6686
Davy
Nominated Adviser & Joint Corporate Broker
Brian Garrahy / Daragh O'Reilly - Tel: +353 1 679 6363
WH Ireland
Joint Corporate Broker
Katy Mitchell / Harry Ansell - Tel: +44 (0) 207 220 1666
About Anglesey Mining plc
Anglesey Mining is traded on the AIM market of the London Stock Exchange and
currently has 420,093,017 ordinary shares on issue.
Anglesey is developing its 100% owned Parys Mountain Cu-Zn-Pb-Ag-Au deposit in
North Wales, UK with a reported resource of 5.3 million tonnes at over 4.0%
combined base metals in the Measured and Indicated categories and 10.8 million
tonnes at over 2.5% combined base metals in the Inferred category.
Anglesey also holds an almost 50% interest in the Grängesberg Iron project in
Sweden, together with management rights and a right of first refusal to increase
its interest to 100%. Anglesey also holds 12% of Labrador Iron Mines Holdings
Limited, which through its 52% owned subsidiaries, is engaged in the exploration
and development of direct shipping iron ore deposits in Labrador and Quebec.
This information was brought to you by Cision http://news.cision.com
https://news.cision.com/anglesey-mining-plc/r/annual-financial-report,c3840948
The following files are available for download:
https://mb.cision.com/Main/22377/3840948/2315180.pdf ANRP23
END
(END) Dow Jones Newswires
September 25, 2023 02:00 ET (06:00 GMT)
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