Polymetals Resources Ltd (ASX: POL) (Polymetals or the Company) is pleased to announce it has secured a Pre-payment / Loan facility to fund the Endeavor mine restart along with favourable offtake terms for delivery of zinc and silver-lead concentrates commencing during H1 2025.
HIGHLIGHTS
- US$20 million (~A$30 million) pre-payment/loan facility secured.
- Funds applied to restart of the Endeavor Mine with pre-production capital A$28m and maximum cash drawdown of A$30m.
- Strategic partnership with global commodity trader Ocean Partners provides flexibility to pursue organic growth in parallel including exploration growth plan and other inorganic opportunities.
- Mine restart work has commenced and on track to deliver cashflow H1 2025, on a robust mine plan: Pre-tax NPV8% A$414m, IRR 345% and free cash flow A$609m over the 10-year mine plan with average annual EBITDA of $89m over first 5 years.
- Favourable offtake arrangement with a blended agreement referenced to spot and benchmark terms.
Following a competitive project funding process, Polymetals Resources Ltd, has entered a binding financing Term Sheet and Concentrate offtake arrangement with global precious and base metal commodities trader, Ocean Partners UK Ltd (OP).
The financing facility will fund the redevelopment of the Company’s wholly owned Endeavor silver, lead and zinc mine located north of Cobar, NSW, Australia. Ocean Partners had initially provided a US$10 million Pre-payment facility in June 2023 as well as an equity contribution of $500,000. That Pre-payment arrangement has now been replaced by the upgraded US$20 million revolving loan facility, subject of this announcement.
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.”
The parties expect to complete definitive documentation for the Prepayment / Loan facility and Offtake arrangement within the next 4 to 6 weeks from the date of this Announcement.
