Polymetals well-placed in pursuit to become producer

Polymetals Resources (ASX:POL) will continue to execute its dual strategy over the coming 6 to 12 months including redevelopment of the Endeavor Mine and exploration of ‘exceptional targets’ contained within its mining leases.

Corporate Development Linden Sproule tells Mining.com.au within 12-months the company will be well-placed to call itself a base and precious metals producer.

“Polymetals is the smallest company at this stage as we continue to work on the re-development of the Endeavor Mine. However, the Endeavor Mine is the second largest mine/project (behind CSA/MAC) so we have a good foundation for growth.”

According to Sproule, that foundation was laid when in March 2023 – just under 2 years after its IPO on the ASX as a gold explorer within Guinea’s Siguiri Basin – Polymetals acquired Endeavor.

The major underground lead-zinc-silver mine is situated in the Cobar Basin structural zone and is located 30km north of the CSA Copper Mine and 40km north-west of Cobar in central-New South Wales. CBH Resources acquired the asset from Pasminco in 2003 and then changed the name from Elura to Endeavor, a cornerstone asset of CBH.

Sproule adds: “Elura was discovered in 1974 by Electrolytic Zinc Australia, after lead geochemical anomaly was drilled and encountered massive sulphide mineralization over 1,000m.

The Endeavor deposit is now the largest, most metal endowed in the basin. It contains the largest concentration of silver and highest grade. The Endeavor Mine is also the second largest by infrastructure behind CSA and is connected for logistics by the national rail network.”

The Cobar Basin is attractive region to operate in from both a mining and investment perspective, he says, as Cobar-style deposits are considered high-grade in nature and are typically polymetallic, meaning multiple metals contained.

Their deposits tend to both extend at depth and occur in clusters. This basically means generally once found, the deposits continue to operate for long periods of time.

“Cobar is a pure mining town and there is a large workforce of career skilled workforce and support industries. Land in the Cobar basin is arid and pastoral land is held on western lands leases. This means that from a cultural and environmental perspective gaining access to undertake exploration programs is very fast and welcomed by landholders.”

Mining in Cobar first occurred in 1871. Given its history, Sproule says it’s ideal for emerging miners as the region as all mines are serviced by national bitumen highways, secure piped water, grid power, and is connected to the national rail network.

Sproule notes the region somehow flies under the radar – “certainly over the past 20 years as most of the mines were owned by foreign companies” – and often its importance often doesn’t receive the recognition that others in Australia enjoy, such as the Goldfields or the Pilbara.

“Being remote, without local ASX news it is almost forgotten. This will change now with MAC (CSA) and Endeavor now back in Australian hands.”

This has led Polymetals to come off a solid H2 2023, increasing the value of total assets to more than $22.45 million, while reducing liabilities, as reported by this news service.

In its interim financial report, the company highlights completing the Endeavor Mine Restart Study (MRS) in early October, which extends to all known mineralised areas with processing via the existing 1.2 million tonnes per annum lead/zinc flotation circuit.

The financial outcomes of the Endeavor MRS for the first 10 years of its redeveloped operational life includes life of mine (LOM) revenue of $1.412 billion, opex of $934 million, EBITDA of $400 million, and LOM free cashflow of $323 million.

Pre-production capex is $23.7 million with the mine having a pre-tax NPV of $201 million, IRR of 91%, and payback of 2.3 years, as reported by Mining.com.au.

Endeavor was first discovered in 1974 with mining and processing operations starting in 1982. 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 it was placed on care and maintenance by CBH Resources, a subsidiary of Toho Zinc Co. Ltd.

Last month, phase two RC drilling by Polymetals at the Carpark prospect was completed. On site XRF analysis of RC samples from 5 holes for a total of 774m suggest that a sulphide source potentially lies beneath the highly anomalous zone now defined over an area of approximately 60m x 60m.

Polymetals says this highly anomalous zone displays similar Pb & Zn values, alteration and mineralisation as displayed above the Main Lode orebody 150m to the North.

The Carpark prospect is located in a large exploration search volume (400m long x 500m deep x 150m wide) that has not been drilled since discovery of the mine in 1974.

Write to Adam Orlando at Mining.com.au

Images: Polymetals
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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.