Raising money for new mine projects is no easy task for junior companies these days, which explains the slow but steady progress being made by Imperial Metals (TSE) to arrange financing for the Parys Mountain base metal project in North Wales.
Parys Mountain is a former producer with an intermittent operating history going back to Roman times, although the bulk of production began at the onset of the Industrial Revolution in the mid-1700s.
The project is 100% owned by Imperial’s 31% owned affiliate, Anglesey Mining, which recently signed an agreement with a Swiss bank and the Bank of Scotland for a project loan facility of up to US$25 million to finance part of the project’s development.
As Anglesey’s major shareholder, Imperial Metals agreed to provide guarantees and sponsorship of the project under the terms of the project loan facility. Imperial Chairman Hugh Morris said financing of the project is expected to be completed by the end of this year, with mine and mill construction beginning in January, 1992.
“On this timetable, the mine is expected to attain full production by early 1993,” he stated.
The Parys Mountain project is reported to contain reserves of 6.45 million tonnes grading 5.35% zinc, 2.34% copper, 2.6% lead, 39 grams silver and 0.32 grams gold per tonne. This estimate, based on a US$35-per-tonne cutoff net smelter return, is expected to provide for a project life of 15 years. The property is also considered to have good exploration potential. Funds arranged in the recent financing will be allocated to the final development of the mine which includes construction of a 850-tonne-per-day concentrator and additional underground development.
Work is continuing, aimed at optimizing the financing package which will be made up of the project loan, the Welsh Office Regional Selective Assistance grant and new equity.
Imperial Metals said negotiations with smelters are “well advanced,” and discussions have begun with a number of contractors relating to the construction of the processing plant.
If Imperial and Anglesey are successful in their plans to bring Parys Mountain back into production, the project would be the first base metal mine of its type to go into production in the United Kingdom in about 100 years.
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