Consolidated Zinc has increased its ownership interest in the Plomosas zinc lead silver mine located in Mexico to 90% through the acquisition of an additional shareholding in Minera Latin American Zinc (MLAZ).
Image: Mining at the Plomosas mine restarted in September this year. Photo: courtesy of Consolidated Zinc Limited.
The company, through its wholly own subsidiary Arena Exploration, acquired a 39% interest in MLAZ to increase its shareholding to 90%.
The total consideration for the additional stake includes a cash payment of A$750,000 and issuance of CZL shares valued at A$1.7m at a share price of 2.34 cents a share.
Consolidated Zinc CEO Brad Marwood said: “We are very happy to have secured the increase in ownership of the Plomosas Mine as we see a bright future for the mine that will deliver increased shareholder value.
“Over the next 9 months, the team will be pursuing avenues to increase production and decrease costs while revenues from zinc sales will allow the Company to resume resource definition drilling to increase the resource base and confidence.”
Pursuant to an agreement signed earlier this year, the Mexican Partners can choose to sell the 10% interest in MLAZ subject to a pre-emptive right in favour of Arena after receiving a bankable feasibility study (BFS).
The Plomosas mine, which was re-commissioned in September this year, is now undergoing production ramp-up.
During next year, CZL expects production to stabilise. Besides, the company will complete the shaft refurbishment to further reduce the operating costs of the mine.
Located 120km from Chihuahua City, Plomosas is anticipated to deliver free operating cashflows during the second quarter of next year.
Historical mining operations at the project between 1945 and 1974 extracted more than two million tonnes of ore grading 22% zinc and lead and over 80g/t silver.