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Polymetals Resources Ltd (ASX: POL) (Polymetals or the Company) is pleased to announce the outcomes of its Endeavor Mine Restart Study (MRS) which demonstrates strong technical and robust economic support to recommence Silver, Zinc and Lead concentrate production at the Mine.
HIGHLIGHTS1
- Updated Endeavor Mine Ore Reserve
- Initial 10-year mine life with significant growth potential
- LOM Free Cashflow of $323M, Pre-tax NPV8 of $201M and IRR of 91%
- Low Pre-Production Capex of $23.7M, Maximum cash drawdown of $37.8M
- Project Revenues of $1,412M (US$2,750/t Zn, US$2,200/t Pb & US$23/oz Ag)
- Project EBITDA of $400M at an average margin of 28.5% p.a.
- First Concentrate production targeted for H2 2024
Polymetals Executive Chairman Dave Sproule commented:
“The delivery of the Endeavor Mine Restart Study is the culmination of an immense body of work completed to a high level of confidence that can support a positive investment decision.
Bringing silver back into the revenue stream via our reset of the historic 100% silver streaming royalty has unlocked significant value at the Endeavor Mine.
The MRS shows a mining operation that makes swift payback of capital because of high operating margins and the restart nature of activity. We are well advanced in our negotiations to replace the Rehabilitation Bond2 which will complete Polymetals acquisition of the Project, as well as a finance facility to ensure coverage for peak negative cash drawdown.
I am buoyed by the growth potential inherent in the project, given the economic qualities of the mine outlined in the MRS, and the potential to expand the mineral resource of the project since the mine remains open to depth and there are many targets in the mining lease that remain untested.
In the past year, Polymetals share price appreciation ranks the Company in the top 5% of the 817 ASX listed Materials Companies during the period3 and the Board, and Management are proud and excited to move back to our roots as producers and to advance the exploration targets identified.
To unlock Endeavor’s embedded value, Polymetals is laser focussed on recommencement of mining.”
Figure 1: Endeavor Project Location and Nearby Mines
Mine Plan
The Mine Restart Study is based on a mine plan and optimised mining schedule that includes initial mining from three zones in the underground mine (Figure 2) as well as the later retreatment of high-grade Sector 1 tailings that were produced during the early years of production which commenced in 1983. The project benefits from the ability to utilise the extensive existing high-quality and well maintained underground and surface infrastructure.4
The MRS has estimated total ore mined and processed of 8.4 Mt over an initial mine life of 10 years. Mining of underground ore extends from Years 1 to 6 and re-treatment of Sector 1 tailings commences in Year 5 (Figure 3). Underground mining is scheduled to commence within 8 months of a project restart decision with concentrate production 2 months thereafter.
Figure 2: Endeavor Underground Mining Areas
Figure 3: LOM Schedule Tonnes and Grade
The MRS has determined total material to be mined which includes Measured, Indicated and Inferred Mineral Resources. The production schedule (Table 2) contains 30% from the Inferred Mineral Resource category primarily from Tailings and Deep Zinc Lode. There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target will be realised.
The company notes that the project forecasts a positive financial performance and is therefore satisfied that the use of Inferred Resources in Production Target reporting and forecast financial information is not the determining factor in overall project viability and that it is reasonable to report the Life of Mine (LOM) Plan with Inferred Resources. It is to be noted that the Deep Zinc Lode contribution (one of 3 underground ore sources) only comes on stream in Year 3 and Tailings in Year 5. The Mine Plan includes capital for in-fill drilling with the objective of upgrading the resource confidence in these two areas.
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EIS Grant for Minnie Springs Copper Porphyry Drilling
- Augustus Minerals has been granted a co-funded drilling grant of up to $110,000 for 2 x 700m deep diamond drill holes under the WA Government’s Exploration Incentive Scheme (EIS) for the Minnie Springs prospect.
- The deeper diamond drill program is designed to test and to provide a 550m deep, 1km wide geological/geochemical/structural cross-section through the large 3km long by 1km wide copper moly porphyry system, linking the Mo mineralised leucogranite to the extensive Cu in soil anomaly to the northeast.
- Previous RC drilling at Minnie Springs intersected mineralisation, geology and alteration halo consistent with the zoning of a large porphyry copper / moly system.
Andrew Ford, GM Exploration
“The Company is pleased to receive an EIS grant to complete deeper drilling at the Minnie Springs Copper Molybdenum Project. The resultant data will enable mapping of the lithology and alteration to a depth of 550m and potentially intersect, or provide vectors to, higher grade Mo-Cu mineralisation using a Mo-Cu porphyry geological model”.
Minnie Springs
Minnie Springs hosts porphyry related copper molybdenum mineralisation previously drilled and defined by Catalyst Metals. A molybdenum Exploration target has been defined for the historicdrillingareacomprisedofbetween12-84Mtasoutlinedbelow (Table 1 and Figure 1, 2.)1.
Table 1. Exploration target size estimate for Minnie Springs Molybdenum depositNote: Based on ~300 ppm cut-off at 100% recovery.
The potential quantity and grade of the exploration target is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resources, and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
The planned diamond drilling will complement the recently completed 3,200m RC drilling program that infilled around hole MSRC012 (18m @ 0.37% Cu and 9.7 g/t Ag from 94m downhole, and 16m @ 0.38% Cu and 19.4g/t Ag from 121m downhole2) and tested the northern half of the 2km long copper-in soil anomaly. Assays from this program are expected to become available over the next month.
The limited exploration in the region, highlighted by 95% of the Ti-Tree project having no previous exploration, demonstrates the prospectivity of this underexplored mineral province.
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Quarterly Activity Report 31 March 2024
Figure 1. Fiery Creek Copper Prospect/Yataga Granodiorite summarizing rock (brown diamonds) and termite mound sample results (black crosses)
Continuing with its primary exploration focus on the Georgetown project in the latter half of 2023, EMU received assay results during the quarter from its second, in field reconnaissance work. The geochemical sampling programme covered the Fiery Creek high grade copper vein swarm and the Snake Creek prospects with significant element results returned from the Fiery Creek Copper (elevated Cu-Au-Ag-Bi-In-Pb-Sb-Te) and Snake Creek (elevated Pb-Ag-Au-Sb).
Whilst the survey was cut short due to inclement weather, EMU was encouraged by the significant success reflected in the assays results. The results from mineralogical studies confirmed EMU’s interpretation of an indicative, scale Copper-Porphyry system at the Fiery Creek prospect and was a highlight of the survey with new information building on the scale and potential of the prospect1.
Assay results returned included:
- Fiery Creek rock assay results up to 23.5% Cu, 0.27ppm Au, 460ppm Ag, 1.9% Bi, 89ppm In, 2.7% Pb, 667ppm Sb, 1470ppm Zn2.
- evidence of strong potential for the presence of critical and strategic minerals (Cu, Bi, In), with precious and base metals.
- evidence of alteration mineralogy, mineralisation geochemistry and areal extent of the Fiery Creek quartz-Cu-Bi vein swarm strongly suggesting a previously unrecognised subjacent porphyry Cu-Mo system.
- Yataga Granitoid Complex termite mound and coincident rock chip sampling returned several anomalous polymetallic zones for follow up.
- Snake Creek Prospect assays returned 0.20ppm Au, 390ppm Ag, 22.4% Pb, 464ppm Sb1.
Significant results were returned from the Fiery Creek Copper prospect with elevated Cu-Au- Ag-Bi-In-Pb-Sb-Te and from the Snake Creek prospect with elevated Pb-Ag-Au-Sb.
The elevated pathfinder element results and a macro-petrology assessment3 of rock samples completed by Mr Nigel Maund, Consulting Economic Geologist, from the previously unexplored Fiery Creek Prospect, point to the discovery of a porphyry copper system.
The sampling program assessed a number of high-priority prospects within the Georgetown Project tenements utilising termite mound and outcrop rock chip geochemistry. A total of 46 rock chip and 489 termite mound samples were collected across eight prospects.
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Basin Energy Mining Exploration Entity or Oil and Gas Exploration Entity Quarterly Cash Flow Report
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