Polymetals Resources (POL) has reached an alliance with Metals Acquisition (MAC) to enhance the value of their respective mining projects in the Cobar Basin, New South Wales, Australia.

MAC owns and operates the CSA Copper Mine, located 5km to the north of Cobar NSW, and POL’s Endeavor Silver Zinc mine is located 30km to the north of CSA.

This collaboration aims to leverage synergies between the Endeavor Silver Zinc mine and the CSA Copper Mine.

The alliance include an initial investment of A$2.5m by MAC at A$0.35 per share for a 4.31% interest in POL under Tranche 1.

This will result in the issuance of 7,142,857 fully paid ordinary shares to MAC or its nominee.

A further investment of A$2.5m at the same share price is outlined in Tranche 2, contingent upon several conditions.

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These include the execution of a tolling agreement for zinc ore treatment, POL securing funding to restart the Endeavor mine and processing plant, and a Water Offtake agreement that allows MAC to draw up to 150 million litres of water annually from the Endeavor mine pipeline.

The alliance is also subject to MAC obtaining necessary consents from its secured lenders and Glencore.

Once MAC holds a 7% share in POL, it will gain the right to appoint one director to the Polymetals board.

This tie-up will enable both companies to exploit the synergies between their neighbouring mines, aiming to improve operational and financial outcomes and increase production at both sites.

POL has also secured the ability to defer the environmental bond replacement for up to two years and has taken full ownership of the Endeavor mine operating assets.

With these developments and the strategic alliance in place, the company is poised to complete its mine optimisation and restart financing.

Refurbishment works at the Endeavor Mine are scheduled to commence in the second half of 2024, with the first concentrate output expected in the first half of 2025.

Polymetals executive chairman Dave Sproule said: “Polymetals has operated in the Cobar Basin for many years and is confident the alliance with MAC will generate significant benefit for all stakeholders.

“Both companies are managed by long term solution focussed operators which will unlock value from existing synergies and identify other opportunities as the relationship grows.

“The Endeavor treatment plant has excess processing capacity which may be utilised by MAC should its current CSA zinc exploration prove positive.

“Polymetals has also been able to assist MAC with provision of a small portion of its water allocation (being excess to POL’s future needs) enabling the CSA mine to increase ore treatment rates into the future.”