Junior explorer Polymetals Resources (ASX:POL) has struck a binding term sheet with Ocean Partners UK to develop an unsecured $15 million prepayment funding facility for its underground Endeavor Mine in New South Wales.
The company says as part of the deal, a 5-year zinc and silver-lead offtake deal with the global trading firm will be valid for up to 36 months and will provide development funding and working capital for the restart of mining and processing operations at Endeavor.
Polymetals reports this agreement comes following a site visit by the company’s technical team and 2 board members, as well as the start of a mine restart study (MRS) at Endeavor, as announced by the company earlier this month (16 June 2023).
Polymetals noted the MRS will take full advantage of the project’s ‘extensive’ existing infrastructure, the internal and external studies generated by the previous mine owner and operator, CBH Resources, and the historical capital and operating costs.
Additionally, the MRS extends beyond the potential mining of the upper main lodes to also include existing areas within the mine, including the 6 – 6 Stope, Deep Zinc Lode, unmined stopes, North Pods, and remnant mineralisation, now economic due to the silver streaming royalty reset.
The company also noted it had appointed experienced production-focused mining engineer David Pelchen as its site representative for Endeavor.
Speaking on the binding term sheet, Polymetals Resources Executive Chairman Dave Sproule says: “Polymetals has had a long relationship with Ocean Partners stretching over 20 years. The support shown by this early endorsement via the prepayment facility and equity participation is a testament to the confidence Ocean Partners has in the Polymetals team and the potential of the Endeavor Mine.
“The partnership with Ocean Partners allows Polymetals to do what it does best“
The partnership with Ocean Partners allows Polymetals to do what it does best, focused on recommencement of operations at the Endeavor Mine.”
With both parties now entered into the binding term sheet, Polymetals Resources announces it remains focused on achieving the restart of operations at Endeavor.
Polymetals Resources is an ASX-listed junior diversified explorer actively exploring the Siguiri Basin in Guinea, West Africa, and the Cobar Basin in New South Wales for the discovery and development of both precious and base metal resources.
The company’s Endeavor Mine is located about 40km northwest of the township of Cobar in New South Wales and represents 1 of 3 ‘significant’ mines in the district. As of 22 May 2023, Polymetals had $250,000 cash on hand and $1.25 million in debt.
Ocean Partners UK is a global trading firm that offers a complete range of trading services for miners, smelters, refiners, and metal consumers around the world. The company operates in a number of countries, including Canada, Chile, Mexico, the UK, and the US.
Write to Adam Drought at Mining.com.au
Images: Polymetals Resources Ltd
