Consolidated Zinc Limited (ASX: CZL) is into the exploration of minerals under metals and mining sector. The company was listed in 2006, and the headquarter is situated in Havelock Street, West Perth, Australia. The company is currently focussing in Mexico where it completed an acquisition of majority stake in high-grade Plomosas.
The company recently announced that it has increased its ownership to 90% in Plomosas mine via an increased shareholding in Minera Latin American Zinc (MLAZ). As on the shareholder’s meet on December 14, 2018, the MLAZ shareholders has approved the increase of issued shares in MLAZ. CZL now holds 90% of all issued shares in MLAZ through its wholly owned subsidiary Arena Exploration Pty Ltd. [optin-monster-shortcode id=”swikrbu1d9j9aq0o4cko”]
The new issue of capital was received formally on December 24, 2018, after the necessary documentation was lodged with the relevant authorities in Mexico. The acquisition consideration given to the Mexican partners for an additional 39% of stake in MLAZ as per the shareholder’s agreement includes:
- Cash consideration of A$750,000
- An issue of shares in CZL for a total value of A$1,700,000, at a share price of 2.34 cents per share.
Post-acquisition of MLAZ by CZL, the Mexican partners, will retain a 10% holding interest in MLAZ. As per the terms of the agreement between Arena and Mexican partners after the completion of the acquisition of MLAZ and the delivery of a Bankable Feasibility Study to the Mexican partners, the interest of the Mexican Partners will stop to be free carried.
The agreement post BFS receipt for Mexican Partners includes:
- A right or option for the Mexican partners to sell the 10% stake in MLAZ. However, this is subject to a right to pre-emptive buy by Arena with a determined sale price of 10% of the average valuation of the Plomosas project. The consideration shall be in shares or cash as agreed by the parties. Failing to any agreement will lead to a 50% cash and shares respectively in CZL.
- If the Mexican partners do not execute their right to sell the stake, or the completion of sale does not occur, then the Mexican partners must contribute pro-rata to expenditure or dilution.
CZL has resorted to a short-term unsecured facility of A$500,000 from the chairman Stephen Copulos and executive director Andrew Richards. The interest rate for the loan is 10% per annum with two equal instalment repayment due on or before February 28, 2019.
Let us now have a look at the performance of stock today. On December 27, 2018, Consolidated Zinc Limited ended the session in green. The stock price of the company stood at A$0.019 per share which implies the rise of A$0.001 per share or 5.556%. The market capitalization of the company stood at $19.05 million. The stock opened and made a high of $0.020 and touched a day’s low of $0.019. Let us now see how the stock has performed in the previous few months. In the time span of the previous six and three months, the stock delivered the return of 100% and -33.33%, respectively.
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