Polymetals Resources Ltd (ASX:POL) planned restart of its wholly-owned Endeavor silver, lead and zinc mine north of Cobar in New South Wales, has overcome its final hurdle, with project financing now secured and an offtake arrangement in place.
Polymetals today announced that following a competitive project funding process it has secured a US$20 million (~A$30 million) loan facility to fund the Endeavor mine restart along with favourable offtake terms for delivery of zinc and silver-lead concentrates commencing during first half of 2025.
The company entered the binding financing term sheet and concentrate offtake arrangement with global precious and base metal commodities trader, Ocean Partners UK Ltd. The strategic partnership with Ocean Partners provides flexibility to pursue organic growth in parallel including exploration growth plan and other inorganic opportunities.
Now that mine restart work has commenced, Polymetals is on track to deliver cashflow in the first half of next year. The company’s mine plan outlines a pre-tax project value (NPV8%) of A$414 million, an internal rate of return (IRR) of 345% and free cash flow A$609 million over the 10-year mine plan, with average annual EBITDA of $89 million over first five years.
The funds will be applied to restart the Endeavor Mine with pre-production capital A$28 million and maximum cash drawdown of A$30 million.
Ocean Partners had initially provided a US$10 million prepayment facility in June 2023, plus an equity contribution of $500,000. That prepayment arrangement has now been replaced by the upgraded US$20 million revolving loan facility.
Production restart on track for H1 2025
Polymetals executive chairman Dave Sproule said: “Completion of the project financing and offtake arrangement is the last hurdle in supporting the restart of Endeavor production, remaining on track for first concentrate output and cash flow during H1 2025.
“Surface and underground refurbishment work is underway, and we very much look forward to realising on the significant Endeavor asset with its substantive remaining ore reserves and exploration potential.
“The strategic partnership with Ocean Partners builds upon an existing 20-year relationship between us, with Endeavor being a perfect fit for our respective capability and experience. The intent is to build a platform for growth, and the flexibility provided by the Ocean Partners facility allows us to execute this strategy.
“The path to production is now secure and we remain laser focussed on delivering on our commitment to our shareholders and the Cobar Region.”