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ONJUNE 27, 2017 Anglesey Mining (AYM) – Research Note Disclaimer: I am currently holding shares in this company. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. This is intended as my personal research note, you are advised to do your own research. Anglesey Mining could see it’s share price rally in the few days as the company is set to release their updated scoping study on their Parys Mountain project. On the 12th May 2017 the company announced that progress on the scoping study was continuing as they had asked both Micon and Fairport to consider alternative production and throughput scenarios, at various levels between 500 and 1,000 tonnes per day. This is due to be released before the end of June 2017 (this week). If the company is to meet this deadline then we can expect the updated scoping study before the end of the week. The company’s fundamentals: Shares in issue: 177.61m Free Float: Approx: 120m (67%) Current MCap: £9m 52 Week High: 6.75p 52 Week Low: 1.20p The Parys Mountain Project Here are some more details about the Parys Mountain project and the potential value that it holds for the company. The 2012 JORC Code compliant resource estimate reported a resource of 2.1 million tonnes at 6.9% combined base metals in the indicated category and 4.1 million tonnes at 5.0% combined base metals in the inferred category. The initial approach adopted for the Scoping Study was a plan to mine these resources at 500 tonnes per day, or 165,000 tonnes per annum, commencing with development of the mineral deposits closest to surface. The Company had chosen this throughput rate as it was believed that the low capital cost associated with this approach would provide the most beneficial outcome. Given the level of indicated resources defined by Micon in 2012, this would result in a mine life of around 16 years, with mining of the indicated resources only and none of the inferred resources. When in full production at 350,000 tonnes per year the mine is expected to produce about 20,000 tonnes of zinc, 8,000 tonnes of copper and 7,000 tonnes of lead metal in concentrates each year. In July 2007, Micon International produced a scoping study demonstrating the viability of mining the White Rock area at 500 tonnes per day with capital expenditures of £15 million and operating costs of £30.25 per tonne mined. In the upcoming scoping study we would expect these numbers to be higher now, potentially around £37 per tonne mined.

What do all think to that? Kind have been saying that for a while. Brent who predicted 22p on PFS?

http://theaiminvestor.com/ Some of those figures look familiar to me.....

Brent I believe the medical term for such is narcissistic personality disorder.

They have been poor with the delivery of news against guidance given but they have never given a defined clear end date like they have this time. Lets see. I suspect the broker who did the last the placing who was not very happy when I laast spoke to him in May will be even less happy if it gets pushed any time further.

You also mention test work on the ore? Surely the pilot plant that produced concentrate from the ore in quantity a few years back proved that factor?

SW you mention 'engineering planning and state 'start'? Fairport Engineering are working on this study alongside Micon to design the mine plan etc. So engineering planning is well underway.

SW have you ever been involved in this project directly? What type of project do you usally work on and to what level? Perhaps BH could take you on?

I agree the ability of the boards capabilities to deliver value of any sort is now on the line. They need to get this report this coming week or face the prospect of creating doubts on the ability they have to deliver. Note that BH suggested that seeking new blood on the board or at project level was an action currently under way. Perhaps in an ideal world they will deliver both on the study and a worthy addition(S) to the team in the coming week.

Superb thats a great help. Just for clarity I post here being a shareholder and my holding is based on the theory it will increase in value! Are you just posting to inform/educate or are you a holder or looking to be one? I think full disclosure of position helps to form a clear context of the information being given.

So I cannot see them going into a further more detailed report in 2018. BH specifically stated that he would be doing the rounds post the production of this PFS and that is terminology he's been using. Maybe this is a quasi type of report above one below the other but robust enough to satisfy funders?

I have been told that no further reporting will be completed and this will be the final study (PFS) prior to the sourcing of funding.

So pay back in 2-3 years at 80% of current spot price. That to me is a very good result, in reality and with expectations zinc/copper will continue to move upwards this project it only bodes well for the current situation.

Using your model for grade/costs/production could you workout the figures for the first say 2-3 years and then model out the remaining? Be interesting to see how that looks from a perspective of a investor looking in to seehow long the risk period would be for payback?

Our last two posts crossed. I was just goint to make the point that the initial higher revenue achieved from the first phase would result in quicker payback and I think that is a very important factor. Obviously with copper being 2x the value of zinc have you weighted the calculations you use later in the mining cycle to reflect thsi or based it purely on the percentage split you assume in the outset? Really good to have you posting. Given your background who would you expect would be the end user for a mine like this if they conducted a JV or similar?

I totally understand what you are saying but your model of the process discounts the higher grade and averages out on pure assumptions that costs are not just somewhat higher but multiple across the entire production phase. So yes hands up my illustration is a snapshot at the highest level at a given time early in the process. However I still think whilst it is prudent to be prudent the stressing of the numbers you have used is perhaps overly conservative. I suggest a point at some stage in the middle will be attained. Is it also not a point that the higher value copper feed comes into play further in the project and thus counters the higher grade zinc mined in the earier phases? Have you considered that?

You have assume mining costs of the deeper zones will be triple. An assumption but will go with it but then used that figure for the overall modelling. I also note that the production figures you use from the eg 1000tpd model used by Micon are significantly lower. I think this is a lot closer than a 'marginal project' and despite the well meaning purpose of your post I think that your appearance here today so close to the expected event is no coincidence.

However I will concede that your model may be the bottom end of the scale and mine nearer the top.

The production figures I worked on came from the micon 2007 report. You can't just slash them and then load everything else to try and prove a point. I stand by my calculations. Let's just triple this and double that? Figures used in my calculations are robust and firm from detailed published data. Like the fact it's a 'weak buy' though. That's given me confidence.

Zinc looking to firm up past recent highs. http://www.kitcometals.com/charts/Zinc.html