- Significant potential at Parys Mountain copper-zinc project
- Joint venture in place
- Economic studies being re-jigged
What it owns
The Parys Mountain copper-zinc asset in Wales
A 12% stake in Labrador Iron, which has assets in Canada
The Grangesburg iron ore asset in Sweden
What's the latest?
As investors in Anglesey know only too well, the Parys Mountain asset has been around for a good long time now, and has periodically made advances towards economic viability, only for the price of a key commodity to fall back, or for market sentiment to turn against mining in general.
The last significant step forward, before the tie-in with QME occurred back in 2017, was when mining consultants Micon put together a scoping study that was encouraging, but didn’t exactly rock anyone’s world.
“The payback was a little bit long,” concedes Anglesey’s Bill Hooley, “and that was partly because we just used the indicated material, and none of the inferred.”
As it stands, Parys Mountain is known to contain 2.1mln tonnes of ore in the indicated category, grading 0.58% copper, 2.18% lead, 4.11% zinc, 46 grams per tonne silver, with a little bit of gold thrown in.
The inferred portion is exponentially larger however, ringing in at 4.1mln tonnes at 1.46% copper, 1.2% lead, 2.4% zinc, with silver and gold credits too.
Note the higher copper grade in the inferred section, which is only partially offset by the lower lead and zinc grades, albeit that the price assumptions used then are a little bit out of date.
But even without the better copper grade, the inclusion of some or all of the inferred material into an updated economic model is clearly going to have a positive impact.
What's the plan?
Under the terms of the deal between QME and Anglesey, QME will carry out a detailed review of Parys Mountain with a view to developing the optimum mining plan. In return for undertaking this work, QME will then receive rights over development contracts as well as a 30% direct interest in the mine once it has reached the point of first production.
So, Anglesey is handing no cash over to QME at any stage, and will not be diluted at the company level either.
Hooley is clearly pleased with the deal, which he sees as a low cost way of at last making something of Parys Mountain. After all, QME are no slouches, based as they are in the heart of Irish mining country. Previous clients of QME have included Boliden Tara, Dalradian, Lundin and Vedanta, and it has a history in the industry dating back to 1987.
So, getting the QME team in on the act is likely to inject new vigour and bring new perspectives to an old project, where the mineralisation has been clearly demonstrated, but for which the puzzle has always been how to go about the most economical extraction.
“These guys are mining contractors,” says Hooley. “They know what to do.”
And sure enough QME is considering a couple of options. There’s the old idea of pushing a decline down gradually, using cash flow from the ore that’s extracted to pay for further development. But there’s also a new idea being floated around that the old Morris shaft, which goes down at least 300 metres, might now be refurbished.
The advantages of that option are that it allows access to higher grade and more copper-rich material more rapidly.
“It will cost more,” says Hooley, “but it might not be prohibitive.”
What’s more, gaining access via the shaft will allow the existing inferred material to be drilled from depth. And if that material can be moved from inferred to indicated as part of that process, then the viability of Parys will become much clearer.
Time will tell, but with some heavyweight mine developers and engineers crawling over the site and the data, it looks as though Parys is at last getting the attention it deserves. Watch this space for further updates.