UNDERGROUND

Merger to revive Cobar Basin base metals operation

Polymetals holds the rights to the Endeavor silver zinc lead mine

Endeavor surface crushing and grinding infrastructure. Photo courtesy Polymetals

Endeavor surface crushing and grinding infrastructure. Photo courtesy Polymetals

Metals Acquisition has consolidated its position in New South Wales' Cobar Basin by putting up $2.5 million to secure an initial 4.31% interest in Polymetals Resources.

Polymetals holds the rights to the Endeavor silver zinc lead mine about 40km to the north of the CSA Copper Mine, which is owned and operated by Metals Acquisition.  

The Polymetals management team has more than 30 years of experience exploring, developing and operating mines in the Cobar Basin and acquired the mine with a view to restarting operations. 

Bringing the Endeavor silver-zinc mine back to production will create more than 200 direct jobs and inject about $50 million a year into the local community for at least another 10 years.

Polymetals and Metals Acquisition will enter into an agreement to treat high-grade zinc ore at Endeavor and Polymetals will provide Metals Acquisition with excess water offtake to enhance CSA's ore treatment capacity.

The Endeavor asset includes an underground mine with a decline and hoisting system, 1.2 million tonne per annum processing plant, grid power, water, railway, and workshop facilities.  

Enhanced operational outcomes

Polymetals executive chairman Dave Sproule said the relationship between the companies aimed to deliver enhanced operational and financial outcomes by increasing mine production at both projects.  

"Polymetals has operated in the Cobar Basin for many years and is confident the alliance with Metals Acquisition will generate significant benefit for all stakeholders," he said. 

"Both companies are managed by long-term solution-focused operators that will unlock value from existing synergies and identify other opportunities as the relationship grows. 

"The Endeavor treatment plant has excess processing capacity, which may be utilised by Metals Acquisition should its current CSA zinc exploration prove positive." 

Metals Acquisition chief executive Mick McMullen said the transaction could extract the best value in the Cobar Basin. 

"Subject to exploration success, modifying factors and some permitting, we think that having the option to treat this material at Endeavor can potentially create significant value for our shareholders," he said.  

"This is a logical way of securing a processing option for any zinc ore we might mine without distracting our operations from the core business of mining and recovering copper.  

"Having secured 150 megalitres of water offtake for the next 4.5 years, with an option to extend, from the pipeline that runs right past our site also increases the potential throughput we can achieve at the CSA Copper Mine for a low cost."    

Endeavor produced approximately 92Moz silver, 2.6Mt zinc and 1.6Mt lead over a 38-year mine life and is one of the more prolific producers in the Cobar Basin.  

 

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