A Toronto-based private group has agreed to buy the Smith Cty., Tennessee zinc mines formerly operated by Pasminco, and plans to go public in a $20-million financing.
The private company, Strategic Resource Acquisitions, paid US$8.3 million up front for the properties, which operated up until May 2003. The total purchase price is US$16.3 million. The operation comes with a mining fleet valued at an estimated US$5 million.
Administrators of Pasminco, which was then in insolvency proceedings, sold the mines to a local aggregate producer, Rogers Group, in December of that year.
Rouyn-Noranda, Que.-based junior Globex Mining Enterprises (gmx-t, glbxf-o) is one of the owners of Strategic and retained a gross royalty on zinc production, amounting to 1% at zinc prices between US90 and US$1.10 per lb., and rising to 1.4% at prices above that window.
The properties consist of five mines: Elmwood, Gordonsville, Cumberland, Carthage and Stonewall. There is a mill rated for 9,000 tonnes per day at Cumberland.
Pasminco’s zinc plant at Clarksville, Tenn., is not included in the package.
The deposits are carbonate-hosted barite-fluorite-sphalerite bodies. A resource estimate (conforming to Australian codes) done for Pasminco in 2003 put the proven and probable reserve at Cumberland, Gordonsville and East Carthage at 7.9 million tonnes grading 3.6% zinc, par of a resource on the whole property of 26 million tonnes grading 3.43% zinc. Historical production was 36 million tonnes running 3.27% zinc.
Strategic is in discussions with the contracting arm of Dynatec (DY-T, DYTCF-O) to manage the project, with the hope of going back into production late this year.
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