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LeadFX to complete Paroo Station DFS in December

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hitpaydirt   Tuesday, 11/21/17 07:38:09 AM
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LeadFX to complete Paroo Station DFS in December

2017-11-20 19:30 ET - News Release


Mr. Andrew Worland reports

PAROO STATION LEAD MINE AND CORPORATE AFFAIRS UPDATE

LeadFX Inc. has provided an update on the status of the definitive feasibility study for a proposed hydrometallurgical facility at the company's 100-per-cent-owned Paroo Station lead mine in Western Australia and its corporate affairs. (All dollar amounts are in U.S. dollars unless otherwise indicated )

Paroo Station Lead Mine - 70,000tpa Hydrometallurgical Facility Definitive Feasibility Study

InCoR Energy Materials Limited is financing the completion of a definitive feasibility study into the technical and financial viability of producing up to 70,000 tonnes per annum of lead ingots from the Paroo Station lead mine ("DFS"). Lead ingots would be produced from a special purpose hydrometallurgical facility to be built on site, adjacent to the existing concentrator facility, treating the flotation concentrate to produce lead ingot.

The DFS is being prepared by global engineering and construction firm SNC-Lavalin (TSX: SNC) out of their Perth office. The preparation of the DFS has advanced with DFS-level engineering, design and estimation nearing completion, subject to the remaining test work programs.

A variability test work program designed to simulate the life of mine concentrate feed to the hydrometallurgical facility has commenced. A hydrometallurgical pilot plant has been assembled at ALS Metallurgy laboratory premises in Balcatta, Perth to simulate the ore to finished product flowsheet. A 20t bulk ore sample has been delivered from site and a pilot flotation circuit has been used to prepare concentrates for the pilot plant. The pilot plant will treat these concentrates to produce lead cathode over a period of up to two weeks, expected to commence on or around November 23, 2017. Accordingly, management expects the DFS to be completed later in December 2017.

The existing mine is fully permitted to mine and produce lead concentrates and to transport those concentrates to the port of Fremantle, Western Australia for export. LeadFX management has met with representatives from the Office of Environmental Protection Authority ("EPA") to discuss the permitting process for the hydrometallurgical facility and proposed mine expansion, and plan to submit referral documentation in January 2018 to allow the EPA and other regulatory agencies to commence their assessment process.

Corporate Affairs

In August 2017 LeadFX announced that each of Enirgi Group Corporation ("Enirgi Group") and Enirgi Group Services Australasia Pty Ltd, a wholly owned subsidiary of Enirgi Group, had provided the Company and Rosslyn Hill Mining Pty Ltd ("RHM) - owner of the Paroo Station lead mine - respectively notice to terminate their respective management services agreements following a transition period of up to 90 days. The transitional period concludes today November 20, 2017.

The management of LeadFX has now been relocated to Perth to reflect the increasing focus of the Company on the re-start process for the Paroo Station lead mine. All corporate, finance, investor relations, regulatory affairs and administration functions are based out of Perth. Moreover, each of the Company's key technical service contributors to the Paroo Station lead mine DFS and its operations are within short distance of key management. LeadFX's head office and mailing address is now: Suite 1D, 21 Teddington Street, Burswood, Perth, Western Australia 6100.

A number of office holders of LeadFX have either ended or end their association with LeadFX today including the Company's Chief Financial Officer Mr. Lincoln Greenidge. The position of Chief Financial Officer will be filled on an interim basis by Mr. Michael Roach who is expected to commence with LeadFX on 18 December 2017. Michael is a CPA with a Bachelor of Commerce degree from Curtin University in Perth. Michael has worked for RHM on two previous occasions and understands the Company's finance and accounting systems well. We look forward to Michael joining the Company. The Board of Directors thanks Lincoln for his dedicated service to LeadFX and wishes him every success for the future.

Commenting on the transition Chief Executive Officer Andrew Worland stated "I would like to thank the Enirgi Toronto and Melbourne teams, in particular my predecessor Rob Scargill, for the highly professional way in which they have undertaken the transition of management services and handover of corporate, financial, investor and regulatory affairs knowledge. Without exception staff have been very gracious with their time and I wish each of them well.

North American lead assets

The Company has a majority ownership position in Chief Consolidated Mining Company ("Chief"), and Chief owns mining properties in the State of Utah, United States. Chief has entered into an agreement with the Utah Division of Oil, Gas and Mining to extend the mining permits on properties owned by Chief and associated with the historic Burgin mines in the Tintic District in Utah. The Company is considering ways to monetize or divest its investments in the region. LeadFX has received expressions of interest from a number of parties to participate in the future development plans for the properties. In the week beginning November 6, 2017 the Company hosted some of these parties on site as they undertook initial due diligence.

Strategic Focus

Management's focus is geared toward bringing the Paroo Station lead mine into production as a lead ingot producer in the shortest possible timeframe. Key tasks required to achieve this include, but are not limited to:

Completing and release the results of the hydrometallurgical facility DFS and a new life of mine economic model for the Paroo Station lead mine;
Initiate value engineering on improvement opportunities identified in the DFS;
Expedite the approvals process for the hydrometallurgical facility;
Manage and secure the Company's working capital position through June 2018 and beyond, including refinancing of the existing secured debt due to Sentient on 28 February 2018;
Subject to the outcomes of the DFS and working capital availability, commence early works and procurement of long lead items;
Securing full project financing for the hydrometallurgical facility.
About LeadFX

LeadFX is a Toronto Stock Exchange listed ("LFX"), Australian based, mining company focused on the development of its lead and lead-silver projects located in Australia and North America. The Company's primary undertaking is the Paroo Station lead mine. The Paroo Station lead mine is located 30km west of the town of Wiluna in Western Australia (refer Figure 1). The Company also owns an 83.5% interest in the Burin mines and surrounding land claims in the Tintic mining district 60 miles south-east of Salt Lake City, Utah and exploration interests in the Amber Mineral belt in Alaska.

The Paroo Station lead mine has been on care and maintenance since January 2015 (refer Figure 2). A dedicated staff of plant operators and technicians have undertaken consistent structural and integrity checks of plant and equipment, run mills at regular intervals and maintained the flotation tanks ensuring the plant can be re-started and brought back to pre-closure production levels within months.

We refer readers to the Company's Annual Information Form dated February 23, 2017 as filed on SEDAR (wwww.sedar.com) and the Company's website www.leadfxinc.com for details of historical production performance for the Paroo Station mine and the NI43-101 Technical Report on the Paroo Station Lead Carbonate Mine, Wiluna, Western Australia dated March 10, 2015 for prepared by SRK Consulting (Australasia) Pty Ltd for details on Mineral Resources.

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