The Endeavor zinc mine in Cobar
The stock of ASX-listed base metals miner Polymetals Resources jumped 21% on Monday as the company announced a strategic alliance with, and investment by, ASX- and NYSE-listed Metals Acquisition (MAC).
Polymetals aims to reopen the Endeavor zinc mine, which is about 30 km north of MAC’s CSA copper mine, near Cobar, in New South Wales.
The alliance will enable each company to exploit synergies between the neighbouring mines, with the relationship aimed at increasing mine production at both projects.
“The Endeavor treatment plant has excess processing capacity which may be utilised by MAC should its current CSA zinc exploration prove positive. Polymetals has also been able to assist MAC with provision of a small portion of its water allocation enabling the CSA mine to increase ore treatment rates into the future,” explained Polymetals executive chairperson Dave Sproule.
He stressed that bringing the Endeavor silver/zinc mine back to production would be a great outcome for New South Wales and the Cobar community, creating more than 200 direct jobs and injecting about A$50-million a year into the local community for at least another 10 years.
The Endeavor mine life has potential to be increased with ongoing mine optimisation, exploration success and value adding treatment options.
In terms of the investment, MAC would put about A$5-million into Polymetal, buying shares at A$0.35 each. Polymetal’s stock traded at A$0.34 a share by midday in Sydney.
In the first tranche, MAC would invest an initial A$2.5-million for a 4.31% interest in Polymetal. In the second tranche, which is subject to certain conditions including a tolling agreement, Polymetal securing funding for an Endeavor mine and plant restart, a water offtake agreement and third-party consents, MAC will invest a further A$2.5-million.
Once MAC has a 7% shareholding in Polymetal, the company will have the right to appoint one director.
Polymetals said that it planned to start Endeavour’s mine refurbishment works early in the second half of 2024, with first concentrate output planned in the first half of 2025.