Anglesey Mining plc said that a preliminary economic assessment (PEA) on its Houston iron project in Labrador, Canada has started and is due to be completed before the end of 2020.
The base and precious metals exploration company, whose main project is Parys Mountain 100%-owned gold mine on Anglesey, holds a 12% interest in Labrador Iron Mines Holdings Limited (LIM).
Anglesey added that the PEA was the first major development of LIM’s assets since the last production in 2014.
LIM aims to advance Stage 2 of its planned direct shipping ore mining operations by developing its Houston deposits located about 25 km south of Schefferville.
The deposits, together with the Malcolm Deposit which is considered to be its northwest extension, are estimated to contain 40 million tonnes grading 57.6% iron. The initial mine plan will focus on a higher-grade component of the resource.
Proposals include developing four open pits sequentially to produce two million tonnes per year of direct shipping iron ore (lump, sinter) over the 10 year mine-life period.
Anglesey said the move followed stronger iron ore prices over the past two years, increased enquiries and expressions of interest from potential off-takers, and with “encouragement from local indigenous stakeholders.”
Anglesey Group chief executive, Bill Hooley, added: “As a director of both Anglesey and LIM, I am very pleased with the news that LIM is, after a number of years of low iron prices, now taking positive steps to move its Stage 2 operations forward.
“The recent sustained increases in worldwide iron ore prices and the market expectations of continuing price support based on global economic recovery bode well for the future of LIM’s projects and for Anglesey’s investment.”
LIM has engaged Roscoe Postle Associates Inc., now part of SLR Consulting Ltd (SLR), to complete the PEA and a current technical report on the Houston deposit.
The current development plan for Houston is based on dry crushing and screening only and envisages an anticipated mining rate of 10,000 tonnes per day. The Houston deposits also contain harder ore than the prior James mine and are anticipated to produce a larger proportion of premium lump product.
Anglesey’s other mining activities include a 10% interest and management rights to the Grangesberg Iron project in Sweden, together with a right of first refusal to increase its interest by a further 50.1%.
Anglesey is also reviewing other compatible base metal projects at advanced stages suitable for incorporation into the Anglesey Group.