Polymetals (ASX:POL) partners with Metals Acquisition (ASX:MAC) for Cobar Basin production
May 27, 2024Polymetals Resources has formed a non-exclusive strategic alliance with Metals Acquisition (ASX:MAC) to synergise and raise the production profile of their respective mines north of Cobar in New South Wales.
Polymetals will receive an investment up to $5 million at 35c a share from its major partner as it moves on a restart at the underground Endeavor silver-zinc-lead mine, the second largest mine in Cobar Basin.
Endeavor sits behind MAC’s leading CSA copper mine 30 kilometres to the south and is now set to treat high-grade zinc ore from its neighbour while providing excess water offtake to enhance ore treatment capacity at CSA.
Polymetals Executive Chairman Dave Sproule said it had operated in the Cobar Basin for many years and was confident the alliance would generate significant benefit for all stakeholders.
“Both companies are managed by long-term solution-focused operators which will unlock value from existing synergies and identify other opportunities as the relationship grows,” Sproule said.
“The Endeavor treatment plant has excess processing capacity which may be utilised by MAC should its current CSA zinc exploration prove positive.”
Sproule added that bringing Endeavor back to production would be a great outcome for the state and region, creating over 200 direct jobs for at least 10 years, with multiple avenues to extend the mine life.
Metals Acquisition Managing Director and Chief Executive Mick McMullen said his company believed the transaction was an example of how cooperation had potential to extract the best value from the basin.
“By investing in POL we are creating a relationship to achieve better outcomes for both companies. We have known the POL management team for over 20 years,” McMullen said.
“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.”
Polymetals can now defer an environmental bond replacement, take full ownership of Endeavor’s operating assets, and move ahead to finishing up optimisation and financing.
The NSW-based explorer and developer plans to begin refurbishment works at Endeavor early in the second half of 2024, believing it can produce its first concentrate in early 2025.
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