Anglesey Mining plc said that the Grängesberg iron ore project in Sweden could resume mining as one of Europe’s largest individual producers of iron ore concentrates.
PRODUCTION
Micon International’s revised pre-feasibility study shows post-tax net present value (NPV) of US$688 million, based on 2.3 – 2.5Mtpa of iron ore concentrate production grading 70% Fe.
Post tax net cashflow would be $2.08bn, for an average annual net cashflow of $130m.
The study assumed an iron ore price of US$120/t (62% Fe benchmark).
Anglesey has begun work on a feasibility study which will include completing recommended drilling to obtain samples for geotechnical and metallurgical testwork.
The company will also review the resource and reserve estimates.
Anglesey holds a near 20% interest in Grängesberg, together with management rights and a right of first refusal to increase its interest to 70%.
The company said the project had a low environmental impact with underground mining, partial tailings backfill, use of existing brownfields site for location of processing plant and tailings storage with existing rail infrastructure
There is also potential for an additional revenue stream from c.210ktpa of apatite concentrate (17-19% P) that could be sold into the global fertiliser feedstock market.
“When combined with the high-grade nature of the concentrate and proximity to European steel mills, the asset clearly demonstrates highly strategic positioning,” said chief executive Jo Battershill.
“We believe the results from the study represents another promising stage in our development of the project and provides Grängesberg with a very solid foundation.”
He added that Anglesey would advance the project to a financial investment decision, which could involve securing a strategic investor, offtake partner, separate listing, or a combination of the options.
GRÄNGESBERG
The Grängesberg iron ore project lies 10km to the southwest of Ludvika in Dalarna County, central Sweden, within the Bergslagen mining district.
The mine produced iron ore from the late sixteenth century until closing in 1990 due to unfavourable iron ore prices.
Grängesberg Iron AB (GIAB) intends to re-open the iron ore mine which was granted a 25-year mining concession in May 2013.