Paroo Station Mine one step closer to restart
TORONTO, Nov. 21, 2016
All dollar amounts are in U.S. dollars unless otherwise indicated.
TORONTO, Nov. 21, 2016 /CNW/ - LeadFX Inc. (the "Company" or "LeadFX") (TSX: LFX) announced today that it has received favourable changes to the Paroo Station Mine's (the "Mine") operating conditions. It has also received a $1 million unsecured, interest-free loan from Sentient Global Resource Fund IV, LP ("Sentient") to help meet its working capital needs.
Paroo Station Mine Update
After an extensive consultation process, LeadFX is pleased to announce that it has received a seven-year extension for access to the Port of Fremantle to export lead concentrate using the Company's best-practice concentrate transportation process. LeadFX exports its concentrate in sealed double-lined bags in locked shipping containers. Securing port access is a critical step in the preparations for a potential restart of the Paroo Station Mine in Western Australia.
Pursuant to an amendment made to Ministerial Statement 905, the Mine's key operating conditions (the "Operating Conditions"), the Company is now permitted to ship through the Port of Fremantle until July 27, 2024. In addition, the Operating Conditions were also amended to reduce the quantum of the financial assurance bond that the Company must have in place during transport operations, from A$5 million to A$2 million, to be in line with the with the worst-case clean-up scenario developed by independent transportation experts. The Company considered the receipt of these amendments to its Operating Conditions as important preconditions to any decision to restart the Mine. With these amendments approved, the Company can now move forward with its Mine restart financing discussions.
In 2014, its last full year of operations, the Mine produced approximately 81,000 tonnes of contained lead in concentrate and employed more than 200 employees and contractors.
Unsecured Promissory Note
Sentient has advanced LeadFX $1 million pursuant to an unsecured, interest-free, promissory note (the "Note"), repayable on June 30, 2017 and on the same terms as the prior promissory notes issued by the Company to Sentient. The interest-free advance by Sentient will enable the Mine to remain in a restart-ready state prior to a decision being made on a restart of the Mine in the coming months.
Rob Scargill, President and CEO said, "Recent LME lead prices are more than 20% higher than such prices when we placed the Paroo Station mine on care and maintenance in January 2015. The extension of the port access removes a significant hurdle to a restart, and with the ongoing support of Sentient we are now focused on securing appropriate restart financing prior to a restart decision."
LeadFX is a Canadian-based mining company focused on the development of lead-silver projects located in stable jurisdictions. Our current portfolio includes a restart-ready lead operation in Western Australia and a development project in Utah, USA. The Company is developing opportunities at its new properties in North America to underpin future cash flow and growth. LeadFX trades under the symbol "LFX" on the Toronto Stock Exchange