Polymetals: Progressing a multi-generational polymetallic Cobar project

Driving in the outback on the Barrier Highway in central western New South Wales is the town Cobar. While steeped in mining history it seldom garners the same recognition as other well-known mining regions.

As the Pilbara is renowned for iron ore and the Goldfields known for the precious metal, Cobar embodies a premier location for base metals deposits. It’s one of the highest grade polymetallic districts in Australia – there’s copper, gold, silver, and also lead produced there.

Mining in Cobar began in 1870 when copper ore was found near a waterhole leading to the opening of the Great Cobar Copper Mine, which at its peak was the largest copper operation in Australia.

The historic mine is in the centre of town and Cobar’s welcome sign is reportedly built on its slag heap. The administration building that was constructed in 1912 remains standing but the Great Cobar Copper Mine is far gone from being the talk of the town.

These days, on any given afternoon at the Great Western Hotel – one said to have the longest pub balcony in New South Wales – the main mine being discussed over $7 schooners is Polymetals Resources’ (ASX:POL) Endeavor silver-zinc-lead project.

Situated in the Cobar structural zone and located about 30km north of the CSA Copper Mine, Endeavor is one of three significant mines in the district that is very much dependent on their success.

It’s also a multi-generational project for the Sproule family whose name is as synonymous with mining as the town Cobar is itself.

“I was literally born on a gold mine – in Canbelego at Mount Boppy Gold Mine”

As Executive Strategy & Corporate Development Linden Sproule explains to Mining.com.au, considering his father Dave Sproule founded Polymetals, it’s fair to say mining is in the family’s DNA much as it is the lifeblood of the Cobar region.

As Linden explains: “I was literally born on a gold mine – in Canbelego at Mount Boppy Gold Mine. I was born in the Cobar hospital but growing up, it was spent in excavators with the employees or in dump trucks, stuff like that living in dongas at the mine camp.

All my school holidays were spent on mine sites not only in Cobar but across the country. So, it’s quite unique, but I’ve had the opportunity to basically grow up in the industry from the day I was born till today.”

A multi-generational project

Sproule senior’s first project was a Mount Boppy mine that from 1992 was reprocessing tailings from Endeavor, which back then was known as Elura. It is one of several mines the Sproule family has operated in the Cobar region since that period of time.

Endeavor was first discovered in 1974. As of 2023 – just two short years from listing on the ASX – it’s been in the portfolio of the family and the company. And the name – Polymetals – is somewhat a fitting one as it aligns with the precious and base metals found in abundance in the area.

“Our Endeavor Mine for us is a multi-generational project. We hope that this project is operating in 20, 30 years’ time. There’s no reason it won’t, based on what we know today, but the hope is obviously to have more scale by discovery of new resources,” Sproule says.

During October 2023, the Endeavor Mine Restart Study (MRS) was released showing an initial 10-year mine life defined with significant growth potential.

Sproule says it’s great for the town to have such a significant and valuable asset back under an Australian company’s portfolio. It wasn’t all that long ago the vast majority of mines in Cobar were owned by foreign entities.

“It’s a region in Australia that goes on and off throughout history, and that’s mainly because it’s leveraged to base metals. Base metals are very cyclical. They go through periods of extremely high prices and then bottom out, but most importantly mining in Cobar has been continuous for over 150 years. That says a lot,” he adds.

“It’s a region in Australia that goes on and off throughout history, and that’s mainly because it’s leveraged to base metals

A total of 32.2 million tonnes of ore grading 8.01% zinc, 5.04% lead, and 89.2g/t silver had been mined and processed to December 2019 when Endeavor was placed on care and maintenance by then owner CBH Resources, a subsidiary of Japanese company Toho Zinc.

Polymetals then acquired the asset from Toho – one of the latest deals where a Cobar asset changed from foreign hands to a local company.

Prior to that deal Peak Gold Mines – a large tenement holding in the Cobar mineral field that began in 1991 – went through a series of acquisitions and changed hands from Rio Tinto (ASX:RIO) to Goldcorp (now Newmont (NYSE:NEM)) before being acquired by Canadian mining firm New Gold (NYSE:NGD). Aurelia (ASX:AMI) purchased Peak from New Gold in April 2018. 

Another notable transaction is the CSA Mine in June 2023. Glencore (LON:GLEN) received US$775 million in cash and US$100 million in shares in the sale to Metals Acquisition Corp (ASX:MAC), an asset Glencore held since 1999.

Australian made

Sproule says these operations are coming back into Australian hands, which means there’s a lot more news coming out around them. This is timely considering the global economy is fracturing after decades of integration and many countries are focusing on a nationalistic approach.

“Cobar is basically getting the light shined on it again for good reason – because it is still one of the highest grade polymetallic districts in Australia,” he explains.

“I think the foreign companies picked those assets up over time back in the day because they are exceptional assets in Cobar. The grades of these mines are very high and they have exposure to base and precious metals. But now it’s coming back into Australian hands so there should be more investment in exploration and operations in Cobar now which is a good thing for the region.”

Operating in Cobar is an attractive mining and investment proposition as the region has components of both base and precious metals, which is quite favourable “because you have almost an internal hedge with these mines”.

“You have the stability of precious metals, which is a store of wealth, as we know, but also leverage to the base metals, which are very cyclical. You can have very good times, but they still wash their face in the down and quite difficult times,” Sproule adds.

Having the spotlight back on Cobar is leading to broader conversations about the importance of these commodities and those within Polymetals’ portfolio. It’s important to note that some base metals might be critical minerals, but not every critical mineral is a base metal.

Base metals refer to industrial non-ferrous metals excluding precious metals and include copper, lead, nickel, and zinc. In metallurgy, non-ferrous metals are metals or alloys that do not contain iron (allotropes of iron, ferrite, and so on) in appreciable amounts.

Nickel is the only one of the base metals group not found in the Cobar region. The others that are extracted all have widespread uses and applications – zinc is used in basically galvanising all steel; copper has a plethora of applications, not least of which includes electrical components; while lead is used in batteries predominantly among other uses.

Pub test and prosperity

On the back of this endowment over the past 150 years, Cobar has built up a significant level of important infrastructure.

Fortuitously, Endeavor and the CSA Mine are both connected to the National Rail Network. But not all companies are connected to the rail and without this network, mining in Cobar would be challenging given its remoteness.

Previously, some lead concentrate from Endeavor was railed down to Port Pirie, in South Australia. Yet zinc concentrate has been exported overseas. It comes from Endeavor down to Waratah Port, which is Port of Newcastle. Likewise, all copper concentrates is moved out to Newcastle.

Cobar’s township currently has about 5,000 people. The local population varies slightly but remains somewhat consistent as it is a pure mining town. There are no other major employers or businesses in the region. Agriculture exists in the form of goat farming but as Sproule explains “it doesn’t move the dial”.

The township therefore relies on the three large mines operating and like most rural towns a general yardstick of its prosperity is the number of pubs open. At one stage around five pubs were in operation in Cobar, which thrives when all three mines are online.

These days just two are pouring beer.

However, things are picking up and the town is looking more prosperous. People are excited about the prospects of Polymetals bringing Endeavor back online. And that’s the main driver, Sproule says, especially for his father Dave as Endeavor might be the last project he’ll work on before heading into retirement and securing legendary mining status in town.

“And obviously we’re looking at doing it economically and making sure that there’s a future, not for a couple of years, but for decades,” he adds.

“Everyone in Cobar is connected in mining, whether they’re directly employed by the mines or through the mining services provided in Cobar. And the reason is deposits in the Cobar Basin are high grade, they offer exposure to both precious and base metals and continue to provide fruits whether its clustered ore bodies or deep depth persistence.”

The Endeavor Mine is down to 1.4km in known resource. The CSA Mine (pictured below) has resources down to 2.3km of depth, which in Australia is very deep.

Sproule says most deposits in the country do not extend at depth. And one interesting aspect about the Cobar Basin is while difficult to find, once these deposits are found they tend to be high grade and basically continuing at depth.

“But either the Peak Mine, the CSA Mine or Endeavor, none of these mines are closed off in terms of the resource doesn’t stop at depth. We don’t know how deep these extend,” he tells Mining.com.au.

“There are some drillholes that are very deep which continue to hit mineralisation but they’re not closed off. So essentially, these operations can run for a long period of time. They’re not 10 to 15-year operations. The CSA mine has been running – it was discovered in the early 1900s – but it has basically been running consistently since 1960.”

Connection to Cobar

What is deep and certainly not closed off is the Sproule family’s connection to Cobar. Linden and his father Dave continue to strengthen their ties to the town and plan to stick for the long haul – as does the Polymetals team.

The aptly named Endeavor Mine encompasses what the company has been seeking to achieve in terms of bringing prosperity (and more pubs) back to the region.

“Well, I was born in Cobar, so it’s really coming back to our roots,” Sproule says.

“Our association with the Endeavor project basically formed Polymetals back in the day when (my father) reprocessed tailings from that mine. And we bought the Mount Boppy mine, which is 50km east of Cobar. So, it’s really coming back to an area that we know intimately.

I studied geology and have always been involved in the industry in some form, and I spent time in metals and mining corporate finance focussed on credit. Then I spent the last six years in Asia,  building relationships and doing various business there, including setting up a greenfields aggregates business. But it was probably inevitable coming back to work on it.

And I’ve been working with Polymetals on the outside since 2017. It was really July 2022 when we were doing the due diligence on this project that I came back to work full-time and moved back to Australia.”

This professional background is likely to come in handy for Polymetals as it advances Endeavor. Sproule believes once the mine is operating again it will contribute about $50 million a year to the local economy. That’s a lot of money for a township of only 5,000 people, he declares.

To get there Polymetals is executing a dual strategy with mine development and exploration. The most important – getting the project back into cash flow, which then allows the company to undertake further exploration. The other is obtaining project finance, which for some juniors at the moment is challenging.

Given the robust nature of the Mine Restart Study results, the current project financing process launched early January is looking promising.

Endeavor may be a multi-generational Cobar project but there’s still no Sproule Street or Polymetals Promenade in Cobar … just yet. The family own plenty of real estate in the region so they are firmly rooted in the town.

And it’s that connection that has the collective Cobar township throwing its support behind the company and Endeavor. As the Executive Strategy & Corporate Development Linden at Polymetals explains, this connection cannot be understated.

He notes today it’s actually quite rare.

“We know everyone in town and have a very good reputation. We’ve had positive relationships with local government and various council members for many years. We’ve got very strong relationships with the major service providers, to the point where every time we go out there, we might be out there for a week, and half of that’s basically spent catching up with the local people. It’s all about the relationships and it’s just how business is done out there. It’s just no different from any country town, really.”

What is different is Polymetals being a publicly listed company with family values. It’s a legacy in which when the beers are flowing at the Empire Hotel has locals eager to ask for updates on how Endeavor is progressing.

As Sproule details: “We don’t muck around – we have barely had the project for 12 months, and we completed our Mine Restart Study, have exploration ongoing and are very close to completing the acquisition, replacing the $27 million environmental bond, and finalising the funding to kick things off. It’s what we do.”

Not one to rest on his laurels, Sproule has no plans for Polymetals to take its foot off the accelerator. Once Endeavor is operating again and generating cash flow, he will however sit back with a well-deserved beer and exhale to take stock of recent progress.

Whether it’s a coldie in one of the only two pubs in town or in a newly opened establishment … the taste of that frothy will be a sweet one, nonetheless.

And Linden Sproule will reflect on how the impending restart of Cobar’s third major mine was ultimately a successful Endeavor for both Polymetals and the regional township.

Write to Adam Orlando at Mining.com.au

Images: Polymetals & Cobar Shire
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Written By Adam Orlando
Mining.com.au Editor-in-Chief Adam Orlando has more than 20 years’ experience in the media having held senior roles at various publications, including as Asia-Pacific Sector Head (Mining) at global newswire Acuris (formerly Mergermarket). Orlando has worked in newsrooms around the world including Hong Kong, Singapore, London, and Sydney.