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.
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.
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
Nominated Adviser & Joint Corporate Broker
Brian Garrahy / Lauren O’Sullivan – Tel: +353 1 679 6363
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