Polymetals Resources Secures US$20 Million for Endeavor Mine Restart with Strategic Offtake Agreement

2 min read | September 17, 2024 11:37 AM AEST | By Team Kalkine Media

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Polymetals Resources Secures US$20 Million for Endeavor Mine Restart with Strategic Offtake Agreement — Image source: Shutterstock

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Polymetals Resources Ltd (ASX:POL) has secured a pivotal funding milestone for the Endeavor silver, lead, and zinc mine located north of Cobar, New South Wales. This development comes in the form of a US$20 million (~A$30 million) loan facility, complemented by a strategic offtake agreement with Ocean Partners UK Ltd, a prominent global commodities trader.

Funding and Strategic Partnership

The newly secured loan facility of US$20 million is set to play a crucial role in the successful restart of the Endeavor mine. In addition to this, Polymetals Resources has finalized a favourable offtake agreement with Ocean Partners UK Ltd for zinc and silver-lead concentrates. This agreement is expected to significantly enhance the financial viability of the mine’s restart.

Projected Financials and Operational Plans

The Endeavor mine is anticipated to generate substantial cash flow, with projections indicating that production could commence by the first half of 2025. The mine plan outlines a pre-tax value of A$414 million, supported by a remarkable internal rate of return (IRR) of 345%. Furthermore, an estimated free cash flow of A$609 million is forecasted over a 10-year operational period. During the initial five years of operation, average annual EBITDA is projected to reach A$89 million.

The pre-production capital requirement is estimated at A$28 million, with a maximum cash drawdown of A$30 million. These financial projections underscore the robust economic potential of the Endeavor mine.

Strategic Importance of the Offtake Agreement

The strategic partnership with Ocean Partners UK Ltd is a significant development for Polymetals Resources. This collaboration not only provides essential funding but also offers flexibility for future growth and development. The offtake agreement is expected to enhance the company's market position and operational stability, paving the way for a successful restart of the Endeavor mine.

Current Status and Future Outlook

Surface and underground refurbishment of the Endeavor mine is currently underway, with the project on track to restart production by mid-2025. The strategic initiatives and financial arrangements put in place are set to position Polymetals Resources for a successful mine restart, with promising financial returns and operational efficiency anticipated.

This funding and strategic partnership mark a crucial step in the advancement of the Endeavor mine project, reinforcing Polymetals Resources' commitment to delivering value and achieving operational excellence.

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