Shares in Polymetals Resources (ASX:POL) have been given a boost after the company inked a strategic investment deal with Metals Acquisition (ASX:MAC) to the tune of $5 million.
Under the agreement, Metals Acquisition, which has a market capitalisation of $1.39 billion, will invest an initial $2.5 million for a 4.31% interest in Polymetals.
Subject to satisfying several conditions precedent, including Polymetals securing funding to restart the Endeavor Mine and process plant, another $2.5 million will be invested.
Shares in Polymetals were up 21.82% to $0.34 as of 11:00am today.
Metals Acquisition CEO Mick McMullen says the company believes the transaction is an example of how cooperation in the Cobar Basin has potential to extract the best value.
“As recently announced, the CSA Copper Mine appears to host high-grade zinc mineralisation near surface and adjacent to existing development,” he says.
“Having secured 150ML of water offtake for the next 4.5 years 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.
By investing in POL, we are creating a partnership to achieve better outcomes for both companies.
We have known the POL management team for over 20 years, they bring a wealth of experience to the area and have the ability to operate mines very efficiently and we are very supportive of their efforts to reopen the Endeavor mine, as well as exploring their immediate mine environment which like the CSA Copper Mine is very underexplored for all base metals, including copper.”
Metals Acquisition’s right to extend the initial 4.5-year term of the water offtake agreement is subject to foreign investment review board approval.
Metals Acquisition is focused on operating and acquiring metals and mining businesses in high-quality, stable jurisdictions that are critical for electrification and decarbonisation of the global economy.
Write to Aaliyah Rogan at Mining.com.au
Images: Polymetals Resources
