REG-Anglesey Mining Plc: Annual Financial Report

Anglesey MiningAnnouncement

25/09/2023 07:15

 

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 

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


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

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. 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.

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.

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.


 

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:

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 High-grade Intersections                 Historical Lower-grade 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.


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

CONTACT:
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.


 ANRP23 (https://mb.cision.com/Main/22377/3840948/2315180.pdf)  



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