Nyrstar acquires Mid-Tennessee Zinc mine complex in US
02/05/2009 - 23:52
euroinvestor.co.uk
Balen, Belgium (1 May 2009) - Nyrstar NV today announced that it has acquired the Mid-Tennessee Zinc mine complex in Tennessee, US for (approximately) €10 million in cash.
The mine complex was acquired from Mid-Tennessee Zinc Corporation (MTZ) (in Chapter 11 Bankruptcy), a wholly owned subsidiary of Strategic Resource Acquisition Corporation (SRA), following approval from the US Bankruptcy Court today. MTZ acquired the mine complex in 2006 and it has been on care and maintenance since October 2008.
The mine complex has a history of close association with Nyrstar's Clarksville smelter which was originally constructed to
treat concentrate from the mine complex. Once operations are recommenced, the mine complex will continue to be an important source of concentrate for this smelter providing (approximately) 50% of its concentrate requirements.
Commenting on the acquisition, Roland Junck, chief executive officer of Nyrstar, stated:
"Once operational, the acquisition of the mine complex provides us with an opportunity to capture a number of important synergies that should support a long term sustainable future for Clarksville, in addition to capturing the value contained in the germanium and gallium rich concentrate."
Nyrstar intends to continue the care and maintenance program for the near future but will review opportunities to recommence operations as soon as commercially feasible. The costs for this program are not material.
The acquisition was funded from existing cash reserves.
Background
The Mid-Tennessee Zinc mine complex comprises facilities at three sites; Elmwood (established in the 1970s), Gordonsville (established in the 1980s) and Cumberland (established in the 1990s). All three mining facilities are located within (approximately) ten (10) miles of each other within an (approximately) 20 square mile area of Smith County, Tennessee and are located (approximately) 50 miles east of Nashville. When operational, ore mined at the three facilities is processed into zinc concentrate at the Gordonsville site. The Gordonsville zinc mine complex is located (approximately) 100 miles from Nyrstar Clarksville.
The most recent resource statement for the mine complex (October 2008) indicates a total ore reserve (indicated and inferred) of (approximately) 30 million tons containing (approximately) 1 million tons of zinc at an average ore grade of (approximately) 3% zinc. Accordingly, the ore reserve indicates a mine life of (approximately) 10 to 15 years producing (approximately) 100,000 dmt per annum of zinc concentrates.
There was a one-for-one reserve replacement record over 28 years of operations from 1975 to 2003.
Previously owners of the mine complex have included Union Miniere (a predecessor of Umicore) and Pasminco (a predecessor of Zinifex (now OZ Minerals)). |
