Polymetals Resources Ltd (ASX: POL) (Polymetals or the Company) is pleased to announce the results of its optimised Mine Plan at its Endeavor Silver Lead and Zinc mine located north of Cobar, NSW.
The Mine Plan follows the Mine Restart Study (MRS) released to the ASX on 16th October 2023. The Endeavor Mine Plan (EMP) demonstrates that the project will generate outstanding financial returns and create substantial value for Polymetals shareholders and the Cobar Region; with significant increases in Ore Reserves, Mine Production, Free Cashflow, Net Present Value (NPV) and Internal Rate of Return (IRR) compared to the MRS.
Polymetals Executive Chairman Dave Sproule said: The work completed by the technical team has generated impressive outcomes for the Endeavor Mine Restart. It epitomises the Polymetals can-do and innovative approach to mining projects and the Board has little doubt on delivery of the practical and timely path to cash flow. 'In addition to this great value, we are also moving to test several ideas to unlock contained gold and silver from the existing stored tailings using hydrometallurgical techniques, and we are actively engaged in exploration to expand the mineral resource of the deposit to extend mine life. 'The quality of Endeavor Mine asset, our Cobar Basin operational familiarity, the significant remaining metal endowment and enormous exploration potential, provides a platform for substantive and long-term returns for our shareholders and the Region. The Company would like to thank its staff and consultants who assisted with the extensive work behind the EMP and we look forward to returning the Endeavor Mine to a profitable and long-term operation.
NEXT STEPS
Following a recent successful capital raising in June, Completion of the Endeavor Mine acquisition in July and Mine Plan during August, the only remaining corporate requirement is to now finalise the $30 million debt facility to support the project redevelopment to positive cashflow in H1 CY2025. Polymetals has already commenced critical path site refurbishment activities, mainly relating to underground infrastructure; being the Level 6 Substation and Surface ventilation Fan. Immediately following finalisation of the debt facility, the planned and relatively modest site refurbishment tasks will be ramped up to meet the scheduled mining and processing timeline. In the meantime, Polymetals is progressing near mine exploration activities with further drilling at its Carpark Prospect underway
EXECUTIVE SUMMARY
Polymetals Resources Ltd (ASX: POL) is a New South Wales based mining company, its core project being the Endeavor silver, lead and zinc mine located 40km to the north of Cobar, NSW. Polymetals operational history within the Cobar Basin commenced in 1992 having processed highgrade silver and gold tailings sourced from the Endeavor Mine. Following extensive due diligence, which included near surface drilling of the high grade Upper North Lode (UNL), Polymetals has now acquired 100% of the historic Endeavor silver, lead and zinc mine. The Company completed a Mine Restart Study (MRS) during 2023 which was published via an ASX Release entitled; 'Endeavor Silver Lead Zinc Mine Restart Study completed' on 16 October 2023. Since release of the MRS, Polymetals has continued to work on optimising the mine plan which has included updating current costs, geotechnical drilling of the UNL, further conversion of Mineral Resources to Ore Reserves and completion of detailed mine planning and engineering. The Endeavor Mine Plan (EMP) delivers an increase in mining and production rates (compared to the October 2023 MRS) over a 10-year mine life which is forecast to generate revenue of $1.9 billion and a pre-tax cash flow of $609 million from the sale of 260,000t of zinc, 90,000t of lead and 10.6Moz silver. The Endeavor Mine Plan (EMP) shows an impressive pre-tax internal rate of return and net present value (IRR of 345% and NPV8% of $414m), low capital cost of mining recommencement ($28m) in a short payback period of 14 months. The Company's Board and Senior Management have extensive experience in exploring for minerals, developing mines and producing metal from mining projects. Mr Matt Gill (a seasoned metalliferous underground mining engineer) has commenced his role as General Manager of the Endeavor Mine and will reside in Cobar during his tenure
METALLURGY & PROCESSING
The Endeavor processing plant was designed as a standard, differential silver-lead & zinc flotation circuit. It was engineered and constructed by Fluor Daniel and commissioned in 1982. Nameplate capacity of the Endeavor mill is 1.2Mtpa, although throughput has been largely mine constrained. A total of 32 million tonnes of ore has been processed over 38 years of operations, with an average annual throughput of 850ktpa. The mill remains in excellent condition with a number of process item modifications from the original design made over the years to enhance efficiency. Notable changes have been the replacement of concentrate regrind mills with Svedala Sand Detritors to enhance concentrate grades. Primary Endeavor ore historically mined and processed consisted of galena (13 %wt) and sphalerite (14 %wt) with pyrite and pyrrhotite being the main floatable gangue. Whilst the ore is considered complex, historical metallurgical recoveries of lead, zinc, and silver continued to improve with time, which was likely a combination of improved metallurgy, attention to optimal grind size, improved reagents, better process control and more experienced float operators. Internal and third-party reviews of the previous metallurgical performance of the Endeavor Processing Plant as well as historic and recent metallurgical test work has validated forecast estimates of metal recoveries from the different ore sources. Underground ore is planned to be mined and processed at an average rate of 830ktpa with reprocessing of the high-grade tailings at 1.2Mtpa
COST ESTIMATION The Endeavor Mine Restart Study in 2023, and this subsequent Endeavor Mine Plan have been compiled during a period of high inflationary pressure, due to global factors, that has impacted most aspects of the industry. Where possible, up to date quotes have been requested from suppliers and used in the estimates. Capital and operating costs have been estimated to accuracies of +/- 15%.
Contact:
Tel: +61 2 6830 2555
Fax: +61 2 6830 2557
Email: info@polymetals.com
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