Member Info for southwesterner

The decline ramp would be only mined to the first production levels of the White Rock zone initially, so it wouldn't be 2.5km initially, but rather less than 1km. Between 30m and 120m on the White Rock Zone, there is over 0.6 million tonnes of ore - over 2 years of production. It would be sensible to drive the decline to about 100m initially before commencing production, which would cost less than $5m - less than 10% of total capital costs. The decline ramp can then continue to be extended as further ore is required from deeper - which is standard practise at every other comparable modern mining operation in the world. There are modern mining operations in for instance Australia or Canada extracting ore at much higher rates than this mine would from much deeper, using only ramp operations. Gwalia gold mine in Australia for an extreme example is extracting 900kt of ore per year (3 times this project) from 1600 metres below surface (the deepest known resources at Parys are about 700m) using a ramp and trucks only! And they did a study on shaft haulage and determined it wouldn't be viable, even though they have to put a shaft down for ventilation - they wont be using it for haulage. I could name you 50+ mines working at the kind of depths and production rates of this project using ramp haulage - but I can't think of any comparable modern mines using shafts at such shallow depths (even the engine zone) or for such low production rates (300kt per year). The only value of Morris shaft to this project is as part of the ventilation circuit, and possibly to take electric cables and pumping ranges down if required later in the project. Going back to the era of winding gears for a project that is such low volume and so near surface is bizarre - nowhere else is doing that. I can't understand this obsession of Bill's with using the shaft to hoist ore out. It seems like something out of the 1970s. Once you are set up for modern ramp mining operations with trucks, scooptrams, mobile drill rigs, etc - to convert to shaft hoisting and then deepen the shaft by 150m seems like a gigantic waste of money, compared to buying an extra truck or two - and I'm pretty sure the consultants for the full feasibility study will eliminate this costly red herring. There's virtually no type of intrinsic risk with decline construction - this is standard practise industry wide. Deepening the shaft is more risky. As for this other idea I saw someone mentioned that Bill was looking at going straight to production at the Engine Zone using the shaft for extraction - I think that is not a good plan at all. The upper parts of the Engine Zone aren't much higher grade than the upper parts of White Rock, especially considering there will be more waste dilution. Costs of extraction will be much higher, and they'll have to use small equipment so it can fit down the shaft. Costs per tonne will rise. I don't think its a good idea at all.

Thank you very much for your posts keeping us updated on the annual meeting & the site visit! It's great to hear they are progressing to a Definitive Feasibility Study on this project, skipping the Prefeasibility Stage - and that they hope to finish this report by H1 2018 - although we all know about Anglesey Mining and deadlines by now! I mean even in their RNS they said "providing this timetable can be met".... they seem to have an uniquely laid back approach to things, which I can't say will instill much needed confidence in the market. Also good they are talking about getting started on the Environmental Impact Assessment, discussions with "metal traders, smelters and banks" - and bringing new personnel in. This plan is a step in the right direction, but they will need a big boost in activity and energy to bring this project forwards. And they will need $. As Brentharg said, 6 figures, I'd guess over £500k though to see it through to completion of a DFS by June 2018. The most likely source of this money is placings to "sophisticated investors" rather than a public offering as someone said below. Sure, placings will dilute holders - but its essential for the future of this company. No placings -> no money -> no feasibility study -> no mine. The value of the company will fall if further studies aren't completed and the project is not moved forwards, no matter what metal prices do short term. Someone mentioned Rio Tinto, Glencore, etc. Don't want to burst the bubble, but no way. No large mining companies are going to show any interest in this project. It's far too small to be of any interest to them. I guess a specialist miner like Boliden which has interests in European zinc mining and smelting is the best hope, but even to them, this is tiny. Last year they mined 330kt of zinc metal in concentrate, from 3 mine operations in Ireland and Sweden. This mine will produce about 8kt... and that's the primary metal for Parys. Probably not enough for even them to bother with really. (on a side note; I'm sorry people have had to put up with all this nuclear waste conspiracy nonsense. I mean its so ludicrous and far-fetched it's not even worth addressing, but for the record... the last thing you'd do with nuclear waste is put it down a mine shaft in a highly faulted and mineralised zone where the radioactivity would contaminate water and spread. Extensive studies have been done into the underground storage of nuclear waste, and Parys is most definitely unsuitable. A nuclear power station shut down the same year the shaft was built - so what - over 25 nuclear reactors have closed in the past 30 years - on average almost one every year - has their waste all been sent to Parys, or just that one? If the waste from all the others has been contained on site and sent to Sellafield for long term storage - why would that one site be any different? I mean what utter nonsense- get a grip.)

"A couple of months back we had some valuable contributions from poster Southwesterner who had some knowledge of DMS - the dense media separation process. This is the technology which will reduce the 1000 tonnes per day of mined ore into "concentrates" sent by road and then sea to the smelters. Southwesterner reckoned that the gold and silver were not recoverable. But Bill Hooley was saying at the 9 Sep gathering that the processing plant will produce three separate concentrates: zinc copper and lead, and that the silver and gold will be in with them, to be recovered at the smelting stage. " I don't have any special knowledge of DMS, I'm just a mining engineer! DMS is just a pre-concentration stage that will remove some of the lower density waste from the higher density sulphide-containing material (the sulphides contain most of the metals which we want). The pre-concentrate will then go into a series of preferential/sequential Flotation circuits which are what actually separates the different metal sulphides (eg. galena for lead, sphalerite for zinc, and chalcopyrite for copper). Something like this, although it doesn't explain it very well; https://www.911metallurgist.com/blog/sequential-copper-lead-zinc-flotation If you read my post again, you'll see that nothing I am saying contradicts what Bill has told you: http://www.lse.co.uk/ShareChat.asp?ShareTicker=AYM&thread=C9A1CEB7-3532-4C8B-A259-1B3C67D216C5 I quote from my post; "This mine should produce 3 concentrates - a copper/gold concentrate, a zinc/silver concentrate and a lead/silver concentrate" However it is much more complicated than just producing something. Just because you have recovered the metals to a concentrate it doesn't mean you will receive the full value for them from a smelter. Sometimes, smelters will just keep byproduct precious metal credits to themselves, other times, they will partially credit them. In the case of gold, recovery to zinc or lead concentrates is unlikely to receive full value. Silver in lead could receive good value, probably less for silver in zinc/copper. Copper smelters often credit gold better, so I could see some significant revenue from gold reporting to the copper concentrate, but it depends on the precise contractual details. The Scoping study says; "Significant amounts of silver and gold will report to each of the concentrates. Some free gold will be recovered by gravity methods ahead of the concentrates and will be sold as Welsh gold." Any specific smelter is treating a wide range of products from mines across the world, and the Parys concentrates will be a tiny percentage of their total input. They aren't going to batch treat them specially, they will be blended in. Any gold will therefore be massively diluted and mixed with any gold recovered from other mines. The only gold that Anglesey Mining can sell will be the gravity recovered stuff, which might be 5-20% at a guess

So here it is, the long awaited scoping study. First, well done to the Board, and Bill, for finally getting this out. Long overdue, but the detailed summary certainly gives us some useful information to analyse, more detail than the 2007 Scoping Study. A few people here seem to have become a bit confused, because the language used isn't always the most clear. We're looking at a 8 year mine life. With annual revenues of approx $34m ($270m total net smelter revenue divided by 8 years). And annual operating costs of $15m ($47/t x 330,000 tonnes). Therefore annual pre-tax profit is $34m-$15m = $19m Capital costs of $53m. These figures aren't fantastic, and are clearly slightly below market expectations. Some of you may remember I posted some figures from my back-of-the-envelope calculations based on the JORC resource a month ago or so. On my post on 25 Jun '17, I predicted Revenue of $48m, operating costs of $23m, and thus annual cashflow of $25m. With capital costs of $40m. Compared these to the real Scoping Study results, and you will find its within about 30% across the board. Quite a few people here slated me for "conservative" figures. Another suggested I had an agenda. Well, guess what, I didn't, and my predictions were a great deal more accurate than the ludicrous $135m revenues and annual profit of $103m being predicted before. Indeed, they were actually overly generous, as I suspected. The reality is, as I said at the time; "This is why this Scoping Study is taking so long, because its not a matter of printing money. This project is a small mine, a fairly low grade (underground) mine - and a fairly marginal project in a lower price environment. That is why the Market Capital is £10m, not £100m. Nonetheless I still believe there is room for a positive Scoping Study and a Net Project Value in the region of $50-100m, which could justify a significant increase in the Share Price. " In the event they've churned out a NPV (at 8%) of $41 million, which is slightly below the expectation for a share price increase. 4.5p is fair value at this point based on that NPV at this stage. I also said quite extensively a month ago that this is a Scoping Study, not a PFS, and those saying it was a PFS were being disingenuous. The project needs more technical work in a number of areas before it can be seriously considered for production readiness. The company have now made it very clear that is the case. They have been recommended a further work program of optimization and feasibility studies including infill drilling and metallurgical testwork, which again I suggested could be necessary. Nonetheless, with this work financed and undertaken, further optimisation of the project is likely to lead to slightly better financial outcomes in a PFS. I see every reason to finance this project to the next stage at current metal prices, which is undertaking the technical work identified and convert

"We recently had a visit from a very knowledgeable poster Southwesterner who works in the mining industry. If you're still around, SW, would you please give us some idea of what recovery percentages are attained in practice?" Because you are talking about the recovery percentages from a JORC Resource, one has to two main sets of losses to come to the end metal revenues. Firstly, you have to consider the "mining recovery" factors. This is the ore material that it isn't practical to extract and is thus excluded from the mine design during stope optimisation. This could be because the geometry of the material makes it not worth the development required to access it, or because extraction of the material will result in excessive dilution. A 85-95% mining recovery would be typical for this type of mine. But then there would be dilution of 5-20% also, probably near the lower end for the White Rock Zone, and near the higher end for the Engine Zone, due to their geometry. Basically we should end up with similar tonnes of material extracted and requiring processing as the resource specifies, but at a significantly lower grade and thus containing less tonnes of metal, probably about 90% recovery overall and 10% dilution. Secondly, you have the "processing recovery". This are harder to predict for me, as a mining engineer. Without the data from the 1990s pilot plant it can't be predicted with any certainty, but looking at similar VMS type deposits, recoveries for the primary metals, Zinc and Lead, are usually between 70-90%. This mine should produce 3 concentrates - a copper/gold concentrate, a zinc/silver concentrate and a lead/silver concentrate. Some zinc could report to the lead concentrate, or vice-versa, and they won't get credited as much by the smelter. The silver could end up in any of the concentrates, but normally it goes mainly to the lead concentrate. Depending on which concentrate it ends up in, it could be credited to different amounts. Depending on the exact conditions of any offtake agreement, the smelters could also apply a recovery factor on their end or various penalty charges. Smelters will often effectively not pay the full value of secondary metals in any primary concentrate, eg. the silver in a zinc concentrate. Overall processing recovery value factors of 80% for Zinc, Lead and Copper, 65% for Silver and 50% for Gold, would seem sensible. If we multiply the 80% processing recovery by a 90% mining recovery, that is 72% overall recovery for the primary base metals, with lesser recoveries for precious metals. That correlates well with the "65% gross recovery factor" used in the GMPV calculations. Remember the raw metal % displayed doesn't contain any recovery losses, it was only used in calculating the GMPV for block modelling of the resource cut-offs. See; http://angleseymining.co.uk/projects/parysresources.html

..... may push them back towards the 1000tpd conventional option. We'll have to wait and see what they go for in the end.

As per my post at 16:02 3/7/17 in "The Upshot" thread, the Development Scenarios have now been whittled down to 700tpd and 1000tpd - although 500tpd is not technically ruled out 700tpd is approximately 230,000 tonnes per annum, and 1000tpd is 330,000 tonnes per annum - based on the companies May RNS where they said that 500tpd equated to 165,000 tonnes per annum. Thats what I'll be using in any modelling. So - why 700tpd and 1000tpd? I think the answer is in the May RNS. 700tpd is based on the conventional froth flotation based processing plant at 500tpd, combined with a Dense Media Separation circuit preconcentrating the ore into the flotation circuit - which the company said "increases the effective daily production rate by about 40%". A 40% increased on 500tpd, is obviously 700tpd. So that's likely what the 700tpd scenario is based upon - the bolting on of a DMS (dense media separation) circuit to the existing 500tpd plant. I'd estimate this costs around $3-5m, based on similar sized DMS plants elsewhere, which would take the cost of the total project to around $28-30m, or say £22m - based on the 2007 Scoping Study + Inflation. 1000tpd therefore is probably just 2 x 500tpd flotation plants bolted together. On the same basis as above I'd estimate an additional capital cost of circa $10m, taking the total project to around $35m, or £27m. At this late stage, Fairport have probably done quite a bit of engineering on the 500tpd plant, so redesigning it from scratch was not a sensible option in the remaining time-frame, and this is why they are considering two scenarios likely based on the core 500tpd plant design, rather than a totally new design. Now... I digress slightly, to answer a question raised by GraphiteTech in the Upshot thread on 25 June: "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?" I mentioned specifically "DMS testwork". Because though I am aware a pilot plant was run circa 1990, and they recovered concentrate which was sent to Avonmouth for smelting, I presume that was a flotation based plant. They should have enough data from that for a PFS level study based on flotation, but DMS is reliant on different principles - density rather than chemical properties of the minerals (and crucially their density and distribution relative to the waste rock) in the ore. I would have thought additional testwork of the ore's performance in a DMS circuit would be needed before Feasibility level studies were completed - although at a Scoping Stage, assumptions can be made. But certainly, financiers will hone straight in on a project which includes a DMS circuit but doesn't have proven DMS testwork. DMS is potentially very attractive for this project because of the characteristics and fairly low grade of the White Rock Zone, but the perceived risks of DMS may push the

As promised in my last post, I would re-evaluate my position based on the "end of June" RNS. Last week, I considered the three possibilities for this RNS being: 1) No update, and we hear nothing until the next statutory meeting - a return to old form. 2) An update outlining which throughput scenario they are pursuing in the Scoping Study - this is technically what they promised in the May RNS. 3) The full Scoping Study - the then expectation on this chat board. I always thought the full Scoping Study materialising now, whilst fantastic, was pretty unlikely. Equally it looks like we've moved on from the era of not updating shareholders on any progress, and the actual result was somewhere near Option 2. I'd note it's not quite Option 2 although it is close, because they haven't actually received the modelling yet, nor have they managed to pick a throughput scenario based on it. They've not officially ruled out 500tpd, although reading between the lines they're indicating that its an inferior option and will be replaced in the final Scoping Study. So what we know now - is they are looking at 700tpd and 1000tpd, and that the preliminary figures for those scenarios are encouraging. You may recall earlier in this thread 2 things I said I'd like to hear were; "We've got a strategy to move this project forwards, we've received the results of the optimized development scenarios - and we've decided to change the scope throughput to 800tpd (or so). "The Scoping Study final results will be published by the end of July, but the preliminary results are positive..." In the case of the first, we're not quite there, but in the case of the second - bang on. That's pretty much precisely what this RNS says. Overall, not enough new information to take any serious action, and I'm holding my speculative buy position and not going in yet, but I will have some analysis on what the 700tpd and 1000tpd options mean shortly.

Re: MoneyMiner - I don't agree that it would take 3 years to build this project. It's a bit of a guess, but I reckon from similar projects in the UK it would take about 12 months to physically build the processing plant and surface buildings. I don't know the specifics regarding site infrastructure already in place, but probably there would have to be some site preparation works for around 6 months prior to actual construction, during which time procurement, engineering and mobilisation would occur. Sure, some components might take several months to build from ordering, but by the point they arrived, the foundations and physical structure of the processing plant could be taking place. All in all, I reckon 18-24 months for construction of the processing plant, from receiving finance. The big advantage this project has relative to other (underground) mining projects is not the existing mining infrastructure (the shaft and 1990s development at the -280m level are largely irrelevant, although the shaft could be used for ventilation) - but rather the shallow depth at which the resource starts, and the fact that up to 1Mt of ore can be developed above the 200m level. I think the boxcut and portal construction would take say 3 months, and then the decline could be developed to the 80m level within 6 months. The mine could be trucking development ore out within 12 months, and it could reach full production in 18 months. That is exceptionally fast for a new underground operation development, which is what this would essentially be. So 18-24 months from project sanction to production, with the processing plant rather than the mine being the critical path, imo

"I was under the impression that we were already well past PFS stage, and that this is basically a detailed feasibility which will show project costs at various levels and revenues etc. Why would they do a PFS at this stage? They know what they have from the 2012 JORC resource and they know what the metal in the ground is worth from current prices." I should certainly hope it shows project revenues and costs, even the most basic study would have that. If you think they are going to produce either a DFS at this stage, you are going to be disappointed I fear. They're going to produce a Scoping Study as defined under the 2012 JORC Code, see p19: http://www.jorc.org/docs/jorc_code2012.pdf This is a serious accredited standard with strict competence criteria, not just make it up as you go along, and the company that are undertaking the mining element of the Scoping Study are a major global mining consultancy staffed by senior mineral industry professionals with extensive experience. They can't call something a DFS or PFS, if it doesn't meet the criteria. They won't be declaring Ore Reserves for this project, because (see p19) : "A Scoping Study must not be used as the basis for estimation of Ore Reserves". I'm really not sure you understand the terminology involved here, but the facts are that MICON have been engaged to produce a Scoping Study. Because of the quantity of Indicated Resources known, and all the historical work on the project, its bound to have some areas which have enough detail to fulfill the standards of a Pre-Feasibility Study, but clearly AYM decided the cost of a PFS at this stage was prohibitive. "You're obviously not confident they will be releasing the scoping study this week are you." It would be good if they did, but all they have committed to at this stage is having the optimised development scenarios available for consideration next week. I hope they'll be able to take a decision on which throughput level they are proceeding to take to the next level of Study with next week at the very least, but if they released the results they have for that scenario so far, that would be great. More importantly though it would be good to hear what the plan is going forwards with regards to more detailed engineering and technical feasibility studies, dense media separation testwork (if they decide to include that), possibly further exploration to convert inferred resources if necessary - and some evidence of commercial developments like offtake agreements. It would be unusual to finance a project based on only a Scoping Study especially for a project that is clearly sensitive to metal prices. We're now talking about a $30m+ CAPEX too, so this is a serious project with risks that need to be examined further. A positive Scoping Study should however create a share price boost, and allow further finance to be raised at minimal dilution to do a PFS, and start the engineering, planning a

If AYM come out next week and say: "We've got a strategy to move this project forwards, we've received the results of the optimized development scenarios - and we've decided to change the scope throughput to 800tpd (or so). "The Scoping Study final results will be published by the end of July, but the preliminary results are positive..." "Going forwards we plan to immediately commence a drilling program this Summer on the Upper White Rock Zone to provide material for DMS testwork, and to upgrade the confidence in the near surface resources.... "Pending positive results, we will commence a PFS to be released by the end of the year with a view to providing a basis for financing the project.... "We have spoken to smelters regarding concentrate offtake agreements and have signed a Letter of Intent with Boliden or Nyrstar, or whoever..... Some kind of action, not necessarily all the above, but some combination thereof, something substantive that indicates we're really going somewhere, not just more ambiguous and cryptic promises.... Credible plans and visible progress. Then I'll definitely Buy in, but more relevantly I daresay many professional mining investors with serious $$$ will also start to give this serious consideration. The company needs to raise £1.0 million+ to complete full studies, and hire staff to get this project on a track towards development, not just another £0.2m.

"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've never been involved with this project in any capacity, though I am familiar enough with the operation of similar scale "VMS type ore deposits" to have a decent idea of what it would entail. Currently I'm involved in operational mine management, not evaluation work, although I have done some evaluation type work before. I'm sure there are some experienced and capable mining professionals involved in this Scoping Study, and they will do a thorough job. Equally, I am sure there are plenty of valid reasons for the Board's strategy with the project now and in the recent past - mainly avoiding spending too much money putting AYM as an entity into financial jeopardy. Like I said, they've done a good job to keep AYM afloat considering the fate of LIM. But I do feel passionately (and logically), that with zinc prices practically at record levels in £ and likely to sustain them going forwards, its now or never for the current Management/Company with this project, and they have to pursue it with more urgency. Putting out 1 Press Release every 6 months is not going to persuade the market that this is interesting - which it is. I'm just here to add some analysis, put my own thoughts on the record, and try and impress upon people a (realistic) impression of the potential of this project.

"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." My primary interest is from being a UK based mining engineer, I would love to see this project go ahead, and I just wanted to provide some more information to the Chat, on the (so far unrealised) potential of this project, the way I see it. I'm not a Holder, but I have historically invested in AYM and other mining shares, and I was pleased with the May update, so I am not ruling out buying in at a future point. I'm not convinced that we will necessarily get the final Scoping Study next week, rather that there are 3 possibilities, only #3 of which would actually be breaking the promises made in the May statement: 1) An update on which optimised development scenario they plan to pick. At that point I will reassess. 2) The final scoping study based on one of the higher tonnage throughput scenarios - if that does come in next week that would be fantastic. 3) Nothing.... yep... I know, it would be extremely disappointing, but I think that's what we're all accustomed to at this point.

"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." With the greatest of respect and not trying to be skeptical, but the Board has said a lot of things about the project over the last decade, which haven't always turned out to be the case. Skipping detail is frowned upon by financiers when we're talking about a $30m investment. The market will want a PFS level study, and if this study does satisfy PFS requirements, the Board should start to call it that, not a Scoping Study. "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?" If he's using the terminology PFS privately, then why is he not on the public record telling the market that it is a PFS? It simply doesn't make sense, if it satisfied *ALL* the requirements of a PFS, he would call it one. Clearly there are one or more requirements that it doesn't satisfy. He's "done the rounds" before, and not managed to achieve development funding for the project. There's always a bit of luck with metal pricing for sure. But there has to be a case that rather than trying to achieve this all in one go, and continually failing at the final hurdle, a more incremental approach would help. Publish the Scoping Study *on time*, even if its not perfect. There's got to be a potential "quick win" from further drilling of the shallow Upper White Rock Zone this Summer, to bring some of that Inferred resource into Indicated (although last time they tried that in 2011-12 the predicted grade of the zone was reduced, it doesn't mean that would occur again) - and then using that to go on to an formally named PFS study later in the year or early 2018 to refine the results and make sure the project is absolutely robust. The market will prefer that.... I get the impression the Board, and especially Bill, is weary of trying to develop this deposit for the past 25 years - maybe it feels like one step forwards and two steps back - but they need to put the past behind them. They need to step up the amount of invigoration and enthusiasm, starting by putting out more regular updates, Press Releases, Presentations, etc. I guess they have survived the downturns of the past, which is more than many companies have - but there's no point owning this project if you aren't going to give it everything now.

"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?" Yes, I have done that more or less. The key thing is, look at p44-45 of the Resource. http://angleseymining.co.uk/projects/Micon_Parys_Mtn_Resources_20121128.pdf Between 40 and 200m depths there is roughly 800,000 of Indicated White Rock ore, at grades of 4.5% Zn, 2.5% Pb, 0.4% Cu and 40g/t Ag. This is decent stuff, and you can see its a massive thick orebody from the diagrams and the amount of tonnage of ore per metre of depth. This Upper White Rock Zone is the key for the initial production, and was what the 2007 Study was based on. But rather than mining it at 500tpd with nothing to follow it on, the idea is to mine it at say 800tpd (250kt/year), which could be done for 3 years. Alternatively you could mine it at 350kt/year for a shorter period of 2.3 years, thats a choice the Scoping Study needs to make. During those 3 years (@ 800tpd) you have revenue of about $32m per year (@ 80% of SPOT prices!), and costs of about $18m (including decline development to the Engine Zone), which is great because it means a reliable bankable cashflow of $14m per year for 3 years, at the start of the project. $42m cashflow. CAPEX paid off. From therein it gets more complicated, because you have to mine the low grade deep White Rock Zone, with the high grade Engine Zone, which have different cost structures, different revenues, and so on. Thats much harder to model - but my model says you can mine for about 3 years at 800tpd, blending in the Engine Zone to the Lower White Rock Zone. The overall average (adjusted for metal contents and prices obviously) grade during this period is slightly higher than the initially period, so revenues of around $35m per year. Costs.... well this is where we get into the debate of the cost of extracting the Engine Zone. Lets assume its the same as the White Rock Zone... very dodgy, but still - that would mean cashflow of about $20m per year for these 3 years. Assume its double the WRZ per tonne, and that would still mean $15m per year. It doesn't make it unviable basically even if I am right about the higher mining costs in Engine Zone. Then for the remainder of the mine life, which would be a couple of years, you're left with the low-grade deep White Rock Zone, which unfortunately won't yield much cash flow at all, about $5m a year. In practise of course, Deep Engine and Garth Daniel would be further explored, drilled and developed to increase this grade and lengthen mine life, but at a PFS level study we can't use those inferred resources. Hope that helps.

"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?" A financial study - neither a Scoping Study nor a PFS - can't consider resources which may or may not exist. That isn't how mining finance works, this isn't the 19th century where a group of adventurers bands together on a whim. We're talking about a circa $30 million investment, which will only be made based on a *robust and financially conservative* Feasibility Study. Even the Scoping Study can only be based upon those resources which have been explored, delineated and are currently categorised under the JORC code, rather than the hope of higher grade ore which we have no idea whether it exists. As I've said, I believe the project is potentially viable based on current Indicated JORC resources, especially if they are frontloaded so the higher grade ore is extracted as early as possible in the mine plan sequence. That's why this is taking so long, because doing that is not simple, and a great deal of work is needed to optimise this project to make it viable. it is not a case of printing money as your revenue forecast would indicate.... if it was, we'd have seen a viable Scoping Study released 5 years ago. But if, and I hope we get there, a viable Study is eventually produced, it's has to be in the same kind of ballpark as I've been talking about - because of the constraints of the existing Resource. For an 800tpd operation - $25-35m CAPEX. Mine life probably 8-10 years of indicated resources + upside. Frontloaded revenues based on the Upper White Rock and Engine Zone. Cashflow of $10-15m per year on average based on 80% of current spot prices, but significantly higher in the initial few years. Payback in 2-3 years. That would be a decent result which would leave room for share price advancement if the Board showed some vigour in then funding a full PFS to be completed later this year or in early 2018.

It's taken a long time to realise that by operating at a capacity well in excess of 500tpd, initially in the higher grade Upper White Rock zone, then blending in Engine Zone ore as soon as the decline is developed to it after a couple of years of production, that the mine revenues can be significantly "front-loaded" compared to average production profile - increasing payback rates and viability, compared to the "shaky" scenario I outlined earlier based on average production rates. The latest statement in May shows that the Board have accepted this crucial strategic change. Thats good news. The project should be viable if it can be front-loaded so that the higher grade ore is mined earlier in the mine plan. It wont change the average revenues, of the overall cashflow very much - but it will improve payback and make financing more viable. With the lower grade deeper parts of White Rock Zone becoming the mainstay only towards the end of the calculated mine life, by which time Deep Engine and Garth Daniel could be further delineated, and blended in to increase grades - a production rate of 800tpd could be sustained for around 10 years based on Indicated resources alone. If a viable production scenario is going to be created based on the existing Resource - it will look something like that which I have described. Full resource upon which the model is based; http://angleseymining.co.uk/projects/Micon_Parys_Mtn_Resources_20121128.pdf (As for your criticism of my tripling of mining costs specifically in the Engine Zone, from the 2007 figures for the White Rock Zone Study - I think you're being unfair. The Engine Zone is a lot narrower than White Rock, only a few metres wide, instead of 20 or 25m wide - and the development cost per tonne of ore is almost directly proportional to the width of the orebody (source: mining engineer). Even if we remove all my cost assumptions regarding the higher cost of Engine Zone - it would only reduce the costs from $65/tonne to about $55/tonne. This is because the Engine Zone is only 1/4 of the production profile of the mine plan ie. 0.5Mt out of 2.1Mt. So any rise or fall in the cost per tonne in the Engine Zone isn't going to have a dramatic effect on the overall cost. Your calculations are beyond flawed, not because your costs are that unrealistic - but because your revenues are totally unrealistic. This mine simply cannot produce 20kt zinc and 8kt copper on average in its mine life, or anywhere near that, based on its JORC resource which will form the basis of a PFS. I am a UK based mining engineer - I would love to see this Project go ahead. I'm just trying to give people a realistic overview of the Project so they aren't disappointed with the Scoping Study result.

Your production figures from the 2007 Annual Report are based on what the mine could theoretically produce based on the FULL production coming from the highest grade Engine Zone resources - that would be for a very limited period of time. It's not the average production that the mine would yield. Look at the Resources - do the calcs ; http://angleseymining.co.uk/projects/parysresources.html Its physically impossible for 20kt/year of Zinc and 8kt/year of Copper to be sustained for more than 2 years because there is only 2 years worth of ore at that grade. The TOTAL Indicated Resource amounts to 12,500 tonnes of Copper, so at 8kt/year, thats only 18 months worth. And Zinc is 86,000 tonnes, so at 20kt/year thats 4 years worth. That gives some idea how flawed your assumptions about metal production rates are. The resource grades simply don't support producing at the levels of metal production you've assumed on average throughout the mine life - or anywhere near that. The only way you could produce 20kt of zinc and 8kt of copper from this mine in a year is running the Engine Zone flat out - and if that was done, the Indicated resource of Engine Zone would be exhausted in less than 2 years, and the high grade Inferred Resources at Deep Engine and Garth Daniel would last another 3 years (and inferred resources cant be included in a PFS level study). The White Rock Zone is much lower grade, and would be the mainstay of Production at the mine. Average production is therefore much lower than your calculations. It's not a matter of your calculations being from robust and firm detailed published data - you're just misinterpreting what "Full Production" means in the 2007 Annual Report. It doesn't mean the mine will ramp up to and sustain that level of production, its just an indication of what the mine could produce theoretically at absolute max production @ 1000tpd. In practise, the 2007 concept about running the mine on the White Rock Zone at 500tpd by a decline then at 1000tpd from the Engine Zone is deeply flawed financially. The main reason I am now optimistic about the viability of this project lies in the fact that the May 2017 Statement recognises that plan is flawed. The May 2017 statement offers some light at the end of the tunnel. It's obvious to me from the Statement that they have done some substantive work because they have finally realised the 500tpd plan is too small scale for the resource and especially the White Rock Zone, given the economies of scale in modern mining techniques and the fixed costs involved in the decline and surface infrastructure.

The extra costs with the deeper ore means an average cost assumption is thus around $65/tonne overall. At 1000tpd, or 350kt per year, thats $23m per year. Revenues of $48m - costs of $23m = Cashflow of $25m per year. Not $100m.... Now that is more reasonable. I'd note this is based on the Indicated Resource only, and production could be sustained at these levels of average cashflow for only around 6-7 years from resources that could form the basis of a PFS. As for CAPEX, I actually agree with your CAPEX assumption, $40m for a 1000tpd operation is reasonable. Now consider instead of Revenues of $48m, based on spot prices, we cut the price forecast assumption to a weighted average of 80% of current prices (which incidentally is exactly what the 2007 Study did). Now revenues are $38m, and cashflow is down to $15m a year. Payback of nearly 3 years, on a 6 year mine life - starting to look shaky. This is why this Scoping Study is taking so long, because its not a matter of printing money. This project is a small mine, a fairly low grade (underground) mine - and a fairly marginal project in a lower price environment. That is why the Market Capital is £10m, not £100m. Nonetheless I still believe there is room for a positive Scoping Study and a Net Project Value in the region of $50-100m, which could justify a significant increase in the Share Price. The main thing holding it back is a lack of belief that the Board will actually produce this Scoping Study on time, and then pursue the Project beyond that. Those of us with a memory (or who have done some research) must know that the company has a long history of promising Scoping Studies and not delivering. In July 2012, in the Annual Report talked about an updated Scoping Study being commenced "scheduled for completion in the autumn". In November 2012, the JORC resource appeared, but no Scoping Study - http://angleseymining.co.uk/news/?p=342 - and the line was "Scoping study to be delivered shortly". It was never published, and in the July 2013 Annual Report it said "progress" had been made, but a "fundamental review" was required. No further mention of the Scoping Study in 2013-15. Then in the Annual Report of July 2016, the idea was revived with "A detailed review .... is planned for the summer of 2016 with a view to completing an updated scoping and economic study later this year. It is expected that the results of this review will be available in the early autumn". In the September 2016 AGM, another mention; "it is expected that the updated study will be presented to the company later in the autumn". And then.... nothing of any consequence about it for another 8 months. I mean this is totally crazy and wouldn't be tolerated in most companies.

Lets look at the Resource that is actually present here - for reference; http://angleseymining.co.uk/projects/parysresources.html The Indicated resource is around 2.1 Mt @ 0.6% Cu, 2.2% Pb, 4.1% Zn and 46g/t Ag. That translates at (probably slightly generous) recovery factors for processing and mining of this kind of deposit, to around 11000t of Zinc, 5500t of lead, 1400t of copper and 300k ounces of silver - per annum. Its not reasonable to assume any revenues from gold really without metallurgical work to prove if it can be recovered from a VMS deposit. If we take say 90% of the spot price to account for concentrate transport and smelting fees, then at current spot prices the mine will turn over; 11000t Zn @ $2400/t = $26m 5500t Pb @ $2000/t = $11m 1400t Cu @ $5250/t = $7m 300kOz Ag @ $14/oz = $4m That totals $48m revenue per annum, at a production level of 1000tpd. And the inferred resource is lower overall grade - lower revenue - about $40m/year, at the above metal price assumptions and 1000tpd. Basically this mine is never going to turn over a Revenue of $135m per annum, and on average over its life it will struggle to get over half of that. It's a totally flawed calculation based on mining the highest grade portions of the Engine Zone at 1000tpd, which isn't something that could be sustained for more than a couple of years based on the current Resources. If we use the actual resource, the published JORC resource, as the basis of the metal grades - reasonable recovery and price assumptions - then we see $48m is a more realistic proposition for revenue. What about costs? In the 2007 Scoping Study the total cost per tonne was given at £30. If we take that at face value, and add 3% p.a. inflation, then we're talking about £40/tonne today or $50/tonne. The Scoping study gave a roughly 40:60 breakdown of costs between mining:processing which will be useful for extrapolation in a second. The 2007 Scoping Study was mining the White Rock Zone only, a large thick deposit, at sub 200m depths only. The new Scoping Study will also include mining the Engine Zone which lies between 250-500m depths, and is much thinner - and therefore much more mine development required per tonne. Mining costs in this zone will be substantially higher, probably triple at a guess. Also the deeper White Rock Zone will be more costly to extract, say add $5/tonne for haulage from greater depths. And there will be substantial additional costs in driving the decline to 500m depths of around $15 million to amortize within the production costs, that wasnt accounted for in the 2007 study - that adds around $8/tonne alone. However on the counter side, doubling production rates will add some economies of scale in both mining and processing, so processing costs should be about the same as the 2007 study and I'll take 10% off the mining cost assumptions.