Polymetals Resources Secures Funding and Offtake for Mine

Polymetals Resources Secures Major Funding for Endeavor Mine

Polymetals Resources Ltd (ASX: POL) has successfully secured a significant pre-payment and loan facility to aid in the restart of its Endeavor mine. This development will allow the company to deliver zinc and silver-lead concentrates starting in the first half of 2025. The announcement highlights an exciting chapter for Polymetals as it endeavors to enhance its production capabilities and capitalize on its mining operations.

Highlights of the Financing Arrangement

The key components of this funding arrangement are truly impressive:

• US$20 million (approximately A$30 million) pre-payment and loan facility has been secured.
• The funds will directly support the Endeavor Mine's restart, which involves a pre-production capital investment of A$28 million.
• A strategic collaboration with Ocean Partners will contribute greatly to organic growth, bringing additional exploration and opportunity to the company.
• The mine is on track to deliver cash flow according to its robust plan, aiming for substantial free cash flow over the next decade.

Details on the Agreement with Ocean Partners

Following a competitive selection process, Polymetals has formalized a financial Term Sheet and offtake agreement with Ocean Partners UK Ltd. This partnership is expected to be beneficial in many ways, including providing flexibility and support for future growth initiatives.

Loan Facility Insights

This upgraded financing facility is a clear indication of confidence in the Endeavor project. Previously, Ocean Partners offered a US$10 million pre-payment facility which has now been replaced by this enhanced facility. Having established a strong relationship over 20 years, both companies aim to leverage their capabilities for greater productivity and market reach.

Polymetals' Growth Strategy

Polymetals Resources is currently focusing on refurbishing the surface and underground facilities. This operational commitment ensures the company can meet its production timeline, targeting first concentrate output and cash flow early in 2025.

Understanding the Economic Potential

According to the comprehensive mine plan, the planned operations are expected to reveal a pre-tax net present value of A$414 million, with an impressive internal rate of return of 345%. Over the course of the first five years, annual EBITDA is projected at $89 million, underlining the mine's effectiveness and profitability potential.

Offtake Agreement Benefits

This arrangement includes a favorable offtake setup that blends traditional pricing models with current market spot rates. The six-year agreement covers zinc and silver-lead concentrates produced from the mine, ensuring security in terms of market strategy and revenue generation.

Next Steps for Polymetals

The company is currently in the process of finalizing the definitive documentation for the established Pre-payment and Loan facility along with the offtake agreement, which is expected to conclude shortly.

About Ocean Partners

Ocean Partners, established in 2004, excels in commodity trading, providing mining and metals industries with tailored support for workflow optimization and market entry. Their expertise extends to a global network that enhances the mining operations of their clients, including Polymetals.

Contact Information

For any further inquiries, you can reach out to:

Linden Sproule
Corporate Development
linden.sproule@polymetals.com

Frequently Asked Questions

What is the size of the loan facility secured by Polymetals?

The secured loan facility amounts to US$20 million, which will contribute to the restart of the Endeavor mine.

How does the offtake agreement benefit Polymetals?

The offtake agreement ensures favorable pricing arrangements for zinc and silver-lead concentrates, providing market security and revenue potential.

What are the expected cashflow timelines for the Endeavor Mine?

Polymetals aims to commence cash flow in the first half of 2025, along with production of concentrates.

What is the value of the Endeavor's mining operations?

The Endeavor Mine is projected to have a pre-tax net present value of A$414 million and is expected to generate considerable free cash flow over the next ten years.

What role does Ocean Partners play in this arrangement?

Ocean Partners provides essential funding and offtake support to Polymetals, leveraging their long-standing partnership to facilitate growth opportunities.

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