Polymetals Resources Ltd has moved closer to restarting the Endeavor Silver, Zinc & Lead Mine near Cobar in central New South Wales after entering revised acquisition arrangements that secure ownership and include deferring the exchange of a Rehabilitation Bond for up to two years.
As well as delivering Polymetals with 100% ownership of the mine and 1,100 square kilometres of exploration tenements in the Cobar Basin, the revised arrangements provide an additional two years to replace the approximately $28 million Endeavor Mine Rehabilitation Bond at a cost of 2% per annum.
The revised arrangements have been entered into by Polymetals’ wholly owned subsidiary, Cobar Metals Pty Ltd, and current owner CBH Resources Ltd, a subsidiary of Toho Zinc Co., Ltd.
“A major achievement”
Executive chairman Dave Sproule said: “This is a major achievement for the company. The bond exchange has been a challenging hurdle to overcome in what had been a depressed market over the past 12 months.
"I would like to thank CBH and Toho for their continuing support of the company and our plans to return the Endeavor Mine to operation.
"Bringing Endeavor back to production will be a great outcome for NSW and the Cobar community, creating over 200 direct jobs and injecting around $50 million a year into the local community for at least another 10 years.
"This mine life has potential to be increased with exploration success and implementation of value adding treatment options.
"On completion of the revised agreements and transfer of ownership to Polymetals, we will expedite project funding and the commencement of planned mine restart activities.
"Fortunately, we are moving into an increasing base metal price environment which significantly improves the project’s economics.”
Polymetals will now proceed to finalise project financing and expedite mine restart activities, targeting silver, zinc and lead production in the first half of 2025.
Revised agreement
Completion of the acquisition is subject to Polymetals' shareholder approval of the grant of security associated with the new arrangements. A Notice of Meeting and accompanying Explanatory Statement to be circulated to shareholders in the coming days with the general meeting expected to be held in late June 2024.
The new agreements and associated arrangements, which include an entirely new Endeavor share sale agreement, provide for the following:
- The termination of the original Endeavor share sale agreement dated December 23, 2022.
- The acquisition by Cobar Metals of all of the shares in each of Cobar Operations Pty Ltd and Endeavor Operations Pty Ltd, the two companies that collectively own the Endeavor Mine, held by CBH subject to the satisfaction of conditions.
- The extension of the date by which the bond is due for replacement to the date which is two years after the date on which completion under the new Endeavor Share Sale Agreement occurs. Under the original agreement, the bond needed to be replaced by April 30, 2024.
- Cobar Metals option to acquire Cobar Infrastructure Pty Ltd, subject to completion under the new sale agreement having occurred and the bond being replaced by Cobar Metals within the two-year period.
- The issue of 1 million POL shares to CBH on completion of the new share sale agreement.