Anglesey gets financing mining within two years

By taking on a local partner, Imperial Metals Corp., (TSE) has put its Parys Mountain project on a fast track to production. Located on the Isle of Anglesey in northern Wales, the polymetallic mineral deposit will now be held in an affiliate called Anglesey Mining. Floating an issue like this probably says something about base metal markets which haven’t been this good in years.

Imperial Metals Group has effectively given up 39.6% of the project to secure adequate financing for what could become the largest base metal mine in the United Kingdom. A prospectus offering, which is being sponsored by Kleinwort Grieveson Securities of London, is expected to raise over $12.5 million on the London Stock Exchange; the bulk of this ($5.8 million) will be spent at Parys Mountain over the next two years.

The planned $10-million development program will include $7 million for a 14-ft-diameter concrete-lined shaft to access the 6.9-million-ton deposit which grades 1.5% copper, 3% lead, 5.9% zinc, 2.0 oz silver, and 0.014 oz gold. Approximately 5.3 million tons of that reserve are defined as mineable.

When the financing is completed, Imperial Metals Corp. will have a 37.8% beneficial interest in Anglesey valued at $12.3 million or 74 cents per share; however, Imperial Metals Group will end up with a 51.8% beneficial interest valued at $16.9 million.

About 75% of the offering has been placed with London-based institutionals and individual public shareholders are expected to take down the rest. In any event, the institutional shareholders have guaranteed the offering, says President Pierre Lebel.

Noting the company has always had a policy of “being a part of the local scene,” Chairman Dr Hugh Morris believes the formation of a local affiliate will give the company needed exposure to the U.K mining and investment community. Incidentally, Morris himself was part of the local scene as a youth, having spent the war years on the Isle of Anglesey. As director of exploration for Cominco he was also closely involved with that company’s exploration effort at Parys Mountain which spanned a period of about eight years.

Over the past 30 years, approximately 153,600 ft of drilling has been completed on the property, much of it directed at copper lode discoveries. However, the significance of the stratiform polymetallic deposits was only recognized about 10 years ago; Imperial Metals, through its privately owned Anglesey Mining PLC, became involved in 1985 and since that time it’s completed over 19,000 ft of drilling and discovered the Transition zone.

Shaft sinking is expected to begin by year-end and it will be sized for production. A major bulk sampling program will be mounted when the ore horizon is reached for metallurgical test purposes. Assuming no significant metallurgical problems are identified, Morris feels the project will be “bankable” when the $10-million-plus phase 1 program is completed.

Daily production rate is expected to be about 1,100 tons or 400,000 tons per year and at today’s metal prices payback is anticipated to be about three years. The proposed mining operation couldn’t be better located; a port facility for concentrate storage and shipment is situated just 15 miles away; a paved highway runs through the property and rail service exists locally too. Power is available from a line servicing a nearby nuclear power plant. Concentrates would probably go to France, Belgium, Germany and possibly England.

The Parys Mountain deposit is situated in a volcanic belt which Morris says displays important mineral occurrences in a number of locations. Anglesey has almost two miles of the belt tied up along strike. Ore grade intersections exist beyond the known deposits at Parys Mountain and there appears to be a strong possibility of a strike extension to the orebody. “It’s also open at depth to some extent,” he adds.