Anglesey Mining PLC (AIM:AYM) has released the results of a pre-feasibility update for its Grängesberg iron ore project in Sweden.
Anglesey holds an almost 20% interest in the Grängesberg project, together with management rights and a right of first refusal to increase its interest to 70%.
The study envisaged production of between 2.3mln tonnes and 2.5mln tonnes of iron ore concentrate per year.
The post-tax net present value of the project rings in at US$688mln and the post-tax internal rate of return is set at 25.9%.
Operating costs per tonne are likely to be US$53.60 free on board to the port of Oxelösund.
Average annual net cashflow would be US$130mln over a 16-year life, with pre-production capital expenditure set at US$399mln.
The study assumed an iron ore price of US$120 per tonne, at a 62% benchmark.
Anglesey will now look advance the project towards production by starting the work on a feasibility study, including completing recommended drilling to obtain samples for both geotechnical and metallurgical testwork, and to update the resource and reserve estimates to refine the metallurgical domains within the orebody.
“We are very pleased to deliver a very positive update of the PFS for the Grängesberg project,” said Jo Battershill, chief executive of Anglesey Mining.
“The project 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.”
He added: “The opportunity for Anglesey Mining is now to advance the 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.”