The Parys Mountain base metals project, in north Wales, has the potential to be a “major” mining operation, able to produce copper, zinc, lead and gold concentrates at a cost that will allow it to withstand industry cycles, Anglesey Mining CEO Bill Hooley said on Monday.

Announcing the results of a preliminary economic assessment (PEA), which includes an updated mineral resource statement, he said a mine at Parys Mountain could be established at a reasonable capital cost.

The PEA evaluated three development scenarios and the most attractive option (Case C) calculated preproduction capital expenditure (capex) of $99-million. The option generates a cumulative cash operating surplus over a 12-year mine life of more than $510-million, translating to a pretax net present value (NPV), at a 10% discount, of more than $120-million with an internal rate of return of 26%.

Using January 2021 metal prices and exchange rate would increase the NPV to $238-million and at a more conservative 12% discount rate this would result in an NPV of $195-million.

“We are very encouraged with these financial results, particularly for the expanded scenario. The PEA clearly demonstrates that Parys Mountain has the potential to be developed as a serious mining project producing an average 7 300 t of copper, 8 000 t of zinc, 7 600 t of lead, 6 000 kg of silver and 160 kg of gold, in concentrates, per year in Case C and become a major contributor to the UK economy,” said Hooley.

The PEA, prepared by consultant Mincon, follows on the optimisation study completed by Quarry and Mining Equipment (QME) in 2020.

The PEA builds on Mincon’s previous work, including its 2012 resource estimate, the 2017 scoping study, including Fairport Engineering’s processing and infrastructure capital and operating costs, and QME’s 2020 optimisation on current mining capital and operating costs and mineable tonnages.

The Mincon PEA includes an updated mineral resource statement showing 5.2-million tonnes of indicated resources at a combined base metals grade of 4.3%, together with 11.7-million tonnes of inferred resources at a combined base metals grade of 2.8%, based on the revised estimated cut-off cost of $48/t.