Polymetals outlines ‘robust’ financial returns for Endeavor Mine restart

Polymetals Resources (ASX:POL) has completed its Mine Restart Study (MRS) for the Endeavor Silver-Zinc-Lead Mine in New South Wales, outlining ‘strong’ technical and robust economic support for a production restart. 

The $43.11 million market capitalisation company reports that following the study, the Endeavor project forecasts a ‘positive’ financial performance, with a life-of-mine free cashflow of $323 million, a net present value (NPV) of $201 million, and an internal rate of revenue (IRR) of 91%. 

This all comes with a ‘low’ pre-production capex of $23.7 million and a maximum cash drawdown of $37.8 million. 

All up, the MRS forecasts project revenues upwards of $1.4 billion and project earnings before interest, tax, depreciation, and amortisation (EBITDA) of $400 million at an average margin of 28.5%. 

The MRS demonstrates an estimated total ore mined and processed of 8.4 million tonnes (Mt) over an initial mine life of 10 years. 

These study results have allowed Polymetals to generate an ore reserve for the Endeavor Mine, which sits at 5.6Mt @ 4.04% zinc (Zn), 1.79% lead (Pb), and 78g/t silver (Ag), compiled from the measured and indicated mineral resources in the mine plan. 

The company anticipates underground mining to begin within 8 months of the project restart decision. Concentrate production is expected to follow 2 months thereafter. 

Polymetals Resources Executive Chairman Dave Sproule says bringing silver back into the company’s revenue stream via the reset of its historic 100% silver streaming royalty has unlocked ‘significant value’ at Endeavor. 

“The MRS shows a mining operation that makes swift payback of capital because of high operating margins and the restart nature of activity. 

We are well advanced in our negotiations to replace the Rehabilitation Bond, which will complete Polymetals’ acquisition of the project, as well as a finance facility to ensure coverage for peak negative cash drawdown. 

I am buoyed by the growth potential inherent in the project, given the economic qualities of the mine outlined in the MRS…”

I am buoyed by the growth potential inherent in the project, given the economic qualities of the mine outlined in the MRS, and the potential to expand the mineral resource of the project since the mine remains open to depth and there are many targets in the mining lease that remain untested.”

Following the completion of the MRS, Polymetals will proceed with the replacement of the Endeavor Rehabilitation Bond. This will complete the acquisition of the project, and the company will also look to secure a suitable finance facility to restart production at the mine. 

Polymetals says refurbishment and pre-production activities will begin early next year. 

The Endeavor Mine is a ‘major’ underground lead-zinc-silver mine in the Cobar Basin in central-west New South Wales. 

Polymetals Resources is an ASX-listed precious and base metals-focused company transitioning from explorer to producer. 

As of 30 June 2023, Polymetals had $2.612 million cash at hand, according to its latest quarterly report. On 10 August, the company received $250,000 of a $500,000 grant awarded by the New South Wales Government Critical Minerals Activation Fund.

Write to Aaliyah Rogan at Mining.com.au    

Images: Polymetals Resources
Author Image
Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.