Trading Symbol
AIM: AYM
27th October 2022
Anglesey Mining plc
(“Anglesey” or “the Company”)
Chairman’s AGM Statement
Anglesey Mining plc (AIM: AYM), the UK minerals development
company, is pleased to release the Chairman’s Statement at the
Annual General Meeting of Shareholders held in London today, which highlights the significant
progress over the last year.
- Significant progress made across the Company’s assets including
the first drilling programme at Parys Mountain since 2012 and the
commencement of permitting activities, while at Grängesberg the
2012 Prefeasibility Study was updated generating very strong
financial metrics.
- Difficulties within the global economy have clearly put metal
prices under pressure relative to the previous twelve months.
However, our Board continue to believe that future demand for
Anglesey’s suite of metals will remain buoyant driven by ongoing
decarbonisation efforts and the aggressive Net Zero targets.
- The last year saw the appointment of Jo
Battershill as CEO and a refresh of the Board with the
appointments of Namrata Verma and
Andrew King as Non-Executive
Directors. Additionally, Anglesey transitioned from the Main Board
of the London Stock Exchange to the AIM market, being a more
flexible regulatory regime which we believe is better suited to the
Company’s current stage of development and strategy.
- Over the next year, we expect to continue the current work
programmes at Parys Mountain that will ultimately advance the
project through the requisite production studies and permitting
phases. We will also focus more attention on the substantial
opportunity presenting itself within the Northern Copper Zone.
At Grängesberg, we expect to commence the recommendations
from the PFS update, including baseline studies for the
environmental impact assessment and updating the mining reserve to
include some improvements to the proposed Grängesberg mine
plan.
Jo Battershill, Chief
Executive of Anglesey Mining, commented: “With today’s AGM
statement, the Chairman of Anglesey Mining provided a summary of
the significant progress made by Anglesey Mining since the last
AGM, including a very clear message of how the Company’s assets can
play a significant role within the UK to meet the 2050 Net Zero
targets set by the Paris Agreement.”
“The last 12-months at Parys Mountain
have seen a significant amount of work, commencing with the first
drilling programme for over a decade followed by geotechnical
modelling for underground mine optimisation work and the conceptual
tailings design. Concurrently, we commenced the permitting and
environmental baseline work that has progressed very well. We
believe the significant gap between our internal valuation of Parys
Mountain and Anglesey’s market capitalisation would be lessened
with permits in hand, consequently the permitting process remains a
critical path activity.”
“We have committed a significant
amount of time on the Grängesberg Iron Ore Project during the last
year and expect to maintain this momentum over the coming year. The
results of the PFS Update were very impressive and clearly
highlighted just how big this opportunity could be for Anglesey
shareholders.”
“Anglesey remains focussed on the
sustainable development of our resource projects while applying
appropriate environmentally friendly solutions. We look forward to
continuing the progress at our key projects over the next
year.”
Anglesey Mining plc is pleased to release the Statement of the
Company’s Chairman, John
Kearney, to Shareholders at the AGM held in London on Thursday 27
October 2022.
Significant progress made across
Anglesey’s projects
The past year since our last AGM has provided shareholders with
some very positive news generated from the significant progress at
both our Parys Mountain copper/zinc/lead project and our iron ore
projects in Sweden and
Canada
A very active year at Parys Mountain saw the first drilling
programme since 2012, the commencement of environmental studies,
the appointment of Knight Piésold to undertake both the design
stage for the tailings management system together with the
geotechnical assessment of the underground development, and
engagement with local planning and regulatory authorities and local
councils.
Meanwhile in Sweden, a
Pre-Feasibility Study Update for the Grängesberg Iron Ore Project
was completed with very encouraging results, while in Canada Labrador Iron Mines continued to
advance its Houston direct
shipping iron ore project toward production.
Metal prices under pressure
The metals relevant to Anglesey’s Parys Mountain project
performed well during the 2021 period, with average prices across
the year higher than 2020. However, since the second quarter of
calendar 2022, metal prices have been very much under pressure. The
previous problems associated with the Covid-19 pandemic have been
replaced by a period of global uncertainty, both economic and
political, volatility, inflation and conflict including the
invasion of Ukraine.
Metals are critical for the climate transition and the clean
energy technologies needed to meet the world’s climate action goals
will require much more metal. For example, every electric car
requires up to four times more copper than an ICE car and every
megawatt of solar power generation capacity requires 5 tonnes of
copper.
In a recent paper published by the metals consulting company
Wood Mackenzie this month of October, they say:
“The road to zero carbon will
see an extraordinary build-out of low-carbon electric vehicles
(EVs) and renewable power-generating capacity. And as the world
reduces its dependence on hydrocarbons, metals will be a linchpin
of a zero-carbon economy.
To meet zero-carbon targets, the
mining industry would have to deliver new projects at a frequency
and consistent level of financing never previously
accomplished.
The implication is that more projects
need to be progressed through the pipeline and quickly, or there
will simply not be enough primary copper to meet demand.
A growing market deficit, exacerbated
by the sharp increase in refined demand growth will underpin a
copper price rally to more than US$11,000/t (about US$5.00/lb) within five years”.
The independent Preliminary Economic Assessment (PEA) on Parys
Mountain, completed in January 2021,
used the three-year trailing metal prices as of September 2020 of US$2.81/lb Cu.
At the August 2022 metal prices
($3.70/lb Cu) copper production from
a Parys Mountain mine would represent 50% of the net smelter
revenue under the expanded case. The PEA indicates production of
75,000 tonnes of copper over the project’s 12-year mine life, when
combined with the other metals produced this equates to an average
copper equivalent production rate of 14,000 tonnes per year over
the proposed life of the operation.
As a consequence, our Board remains very confident that the
medium- and long-term outlook for most minerals, particularly for
copper at Parys Mountain, is very encouraging.
We are also confident that the economics of Parys Mountain
continue to remain robust given the Preliminary Economic Assessment
completed in 2021 utilised very conservative pricing assumptions,
including US$2.81/lb for copper and
US$1.20/lb for zinc, which compare to
prices of US$3.59/lb and US$1.34/lb at the date of this AGM.
On the iron ore front, the price has been under some pressure,
primarily due to the ongoing Zero Covid Policy in China that has reduced construction activities
and dampened demand for steel and therefore for iron ore.
Nevertheless, we believe Anglesey is very well positioned to
benefit from the inevitable future recovery in demand.
At Grängesberg, a very positive update of the PFS indicates
production of 2.3 - 2.5Mtpa of iron ore concentrate grading 70% Fe
that generates strong economic returns, including a NPV8% of
US$688 million post-tax, and
confirming that the Grängesberg iron ore mine has the potential to
be restarted as one of Europe’s largest individual producers of
high-grade iron ore concentrates.
The Ukraine conflict has
highlighted the strategic positioning of Grängesberg. Prior to the
conflict, Russia and Ukraine supplied more than half of all iron
ore into the European steel market. With the future uncertainty
around this supply, a long-term source of iron ore could be highly
sought after by European and Middle Eastern steel producers.
Grängesberg, with the high-grade nature of its concentrate,
existing infrastructure and favourable location in southern
Sweden in proximity to European
steel mills, represents a highly strategic opportunity.
Corporate developments
A number of changes were made on the corporate end during the
year. These included the appointment of Jo
Battershill as CEO and refreshing the Board with the
appointment of two new Non-Executive Directors, Namrata Verma and Andrew
King who both join Anglesey with the highest of reputations
in their own particular sectors and their combined and extensive
experience in the financing sector of the worldwide minerals
industry will be critical in the successful funding of both
projects.
Additionally, Anglesey moved its listing from the from the Main
Market to the AIM market of the London Stock Exchange. We
believe the AIM listing will offer greater flexibility, enabling
the more rapid and cost-effective execution of transactions and
financings. AIM also provides improved visibility for Anglesey and
enhanced liquidity for investors.
Next steps
I firmly believe the outlook for Anglesey is very promising. At
Parys Mountain, the current work programmes will continue to
advance the project through the production studies and permitting
phases. Additionally, the Anglesey team have been reviewing the
historical drilling and internal resource reports for the extensive
Northern Copper Zone. Initial examination suggests that the system
could be significantly larger than currently modelled but will
require additional drilling to test prospective areas.
At Grängesberg, planning will continue around commencing the
recommendations from the PFS update, including baseline studies for
the environmental impact assessment and updating the mining reserve
to include some improvements to the proposed Grängesberg mine
plan.
In closing, on behalf of the Board of Directors, I would like to
thank our shareholders for the ongoing support, and I remain very
confident that the assets held by Anglesey will deliver significant
value as they continue to be progressed over the next year.
About Anglesey Mining plc
Anglesey Mining is traded on the AIM market of the London Stock
Exchange and currently has 280,675,721 ordinary shares on
issue.
Anglesey is developing its 100% owned Parys Mountain
Cu-Zn-Pb-Ag-Au deposit in North
Wales, UK with a 2020 reported resource of 5.2 million
tonnes at 4.3% combined base metals in the Indicated category and
11.7 million tonnes at 2.8% combined base metals in the Inferred
category.
Anglesey holds an almost 20% interest in the Grangesberg Iron
project in Sweden, together with
management rights and a right of first refusal to increase its
interest to 70%. 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.
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 / Lauren O’Sullivan
– Tel: +353 1 679 6363
WH Ireland
Joint Corporate Broker
Katy Mitchell / Harry Ansell – Tel: +44 (0) 207 220 1666
Canaccord Genuity Limited
Joint Corporate Broker
James Asensio / Harry Rees – Tel: +44 (0) 20 7523 8000
Scout Advisory Limited
Investor Relations Consultant
Sean Wade – Tel: +44 (0) 7464
609025
LEI: 213800X8BO8EK2B4HQ71