Beaufort Securities Breakfast Alert: Anglesey Mining plc


Today's edition features:

Anglesey Mining (LON:AYM)




The FTSE-100 ended Friday's session 0.47% lower at 7,452.91 whilst the FTSE AIM All-Share index was up 0.22% at 969.70. In continental Europe, the CAC-40 finished 1.57% lower at 5,117.66 whilst the DAX finished down 1.66% at 12,240.06.

Wall Street

In New York on Friday, the Dow Jones fell 0.15% to 21,580.07, the S&P-500 slipped 0.4% to 2,472.54 as did the Nasdaq at 6,387.75.


In Asian markets this morning, the Nikkei 225 had was 0.78% lower at 19,943.2, while the Hang Seng firmed 0.46% to 26,829.07.


In early trade today,  WTI crude was up 0.13% to $45.83 per barrel and Brent was 0.23% higher at $48.17 per barrel.



IMF downgrades US and UK growth

The UK and US economies will expand more slowly in 2017 than previously predicted, according to the International Monetary Fund (IMF). It said "weaker-than-expected activity" in the first three months of the year meant the UK would grow by 1.7%, compared with an earlier 2% forecast. And the IMF revised down its US outlook from 2.3% to 2.1%. However, its overall global economic predictions - of 3.5% growth in 2017 and 3.6% in 2018 - remain unchanged. Meanwhile the outlook for several eurozone economies is brighter than initially thought, with countries including France, Germany, Italy and Spain seeing growth forecasts revised up. In its latest World Economic Outlook, the IMF said the "pick-up in global growth" that it had anticipated in its previous survey in April remained "on track". But it added that while the global growth projection was unchanged that masked "somewhat different contributions at the country level".

Source: BBC News


Company news

Anglesey Mining (LON:AYM, 5.00p) – Speculative Buy

Anglesey Mining today announced results from a Scoping Study on its wholly owned Parys Mountain copper-lead-zinc project in North Wales. The study was prepared by Micon International and Fairport Engineering with several production scenarios being examined including 500 tonnes per day (tpd), 700tpd and 1,000tpd as well as the use of a dense media separation plant (DMS). The best financial scenario was obtained with 1,000tpd production with a DMS plant and an estimated mine life of eight years. Assuming a US$53m pre-production capital spend and current metal prices, the pre-tax NPV(10%) is US$33.2m with an IRR of 28.3%. Parys Mountain is a significant zinc, copper and lead deposit with small amounts of silver and gold. The current resource estimate is 2.1Mt grading 6.9% combined base metals in the indicated category and 4.1Mt grading 5.0% combined base metals in the inferred category. The Scoping Study was based only on the 2.1Mt of indicated resources. The life-of-mine could be increased significantly and the NPV enhanced should a high proportion of the 4.1Mt of inferred resources be converted into the indicated category.

Our View: The above announcement is an important milestone for the Company as this is the first detailed economic study to be done on Parys Mountain for a long time. The Scoping Study results point to a potentially viable mine plan with robust internal rate of return using current metal prices. We note that the NPV(10%) increases to US$43.2m and the IRR to 33.1% using a zinc price of US$1.35/lb and a copper price of US$3.00/lb and all other things being equal. Whilst more detailed engineering and metallurgical work is required to demonstrate specific metal concentrate produced as well as the tailings management, we are encouraged with the initial results and look forward to further optimisation studies on the continued development plan for Parys Mountain. In the meantime, we maintain our speculative buy on the stock.

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