Zinc producer New Century Resources (ASX: NCZ) has entered a strategic partnership with global precious metals mining company Sibanye-Stillwater to drive its aspirations of becoming a world-leading environmental, social, governance (ESG) focused tailings management and economic rehabilitation company.
Under the partnership, Sibanye-Stillwater (NSYE: SBSW) has subscribed for 139.6 million New Century shares for US$16.3 million (A$21.6 million).
Select institutional investors took up the remaining US$8.5 million (A$11.3 million) of the full placement, which amounted to U$24.8 million (A$32.9 million) and issued a total 212.4 million New Century shares.
To ensure Sibanye-Stillwater secures a 19.99% stake in New Century, another placement will be undertaken after it has been approved by shareholders at the annual general meeting next month.
This additional placement will see Sibanye invest a further maximum of US$29.9 million (A$39.7 million).
As well as the placements, eligible shareholders can participate in a one-for-four full underwritten non-renounceable entitlement offer that will raise an extra US$35.2 million (A$46.9 million).
The maximum raised will amount to US$89.9 million (A$119.6 million).
All shares under the placements and entitlement offer will be issued at A$0.155 each.
These equity raisings will underpin New Century’s strategy to pursue its ESG aspirations, including securing the Mt Lyell green copper project in Tasmania and growing its advisory services to large-scale, tailings reprocessing and rehabilitation operations around the world.
“With the strategic investment by Sibanye-Stillwater and the option over Mt Lyell copper mine, New Century is in an enviable position to grow its ESG focused business through potential-near term green copper supply while also developing a client-focused tailings management services division,” New Century managing director Patrick Walta said.
As part of the alliance, Sibanye-Stillwater and New Century have agreed to identify mutual opportunities and share knowledge and technical best practice which will allow each entity to expand its own portfolio of economic rehabilitation projects and clients.
With its US$10 billion market cap, Sibanye-Stillwater has an interest in numerous gold, platinum group metal, lithium, and nickel assets through North America, South America, Southern Africa and Europe.
New Century says Sibanye-Stillwater’s substantial multi-national mining experience, along with its industry leading ESG credentials and commitment to growth in sustainable mining and tailings retreatment aligns with its own goals.
Mt Lyell copper acquisition
Although Sibanye-Stillwater and New Century will identify potential acquisitions together in the future, New Century is using equity raising proceeds to acquire the Mt Lyell copper project in Tasmania.
According to New Century, the asset provides the opportunity for sustainable green copper production, large-scale tailings reprocessing and economic rehabilitation.
Mt Lyell has a resource comprising 1.1 million tonnes of copper and 940,000 ounces of gold, which can underpin a multi-decade mine life.
New Century says the mine has strong green credentials and a low carbon footprint due to the Lake Margaret hydro power station supplying half the energy requirements.
There is also the opportunity for tailings reprocessing and water treatment.
Historically, Mt Lyell generated strong cash flow and although not currently operational, it contains a plant on care and maintenance and other requisite infrastructure.
The mining lease is valid, and a tailings dam is also present.
Tailings retreatment opportunity
Part of the mine’s attraction to New Century is the potential to re-process the tailings via a dedicated flotation circuit.
This would involve removing potentially acidic forming material (pyrite) and open up the option to dry stack or use the waste as a paste-fill underground.
Additional benefits would comprise increasing the volume of the tailings dam – resulting in longer periods between wall lifts.
The dam currently contains about 42Mt of tailings and the potential to unlock further economic benefits from other minerals that may be present including cobalt, gold and silver which are strongly associated with pyrite.
Australia’s largest tailings retreatment project
In advancing Mt Lyell, New Century will leverage its experience and intellectual property from its existing Century operation in Queensland, which is Australia’s largest tailings retreatment project.
After Century was placed on care and maintenance in 2016, New Century converted its infrastructure to enable tailings reprocessing.
Tailings reprocessing at the mine has now been operational since 2018.
The company says the retreatment project at Century has provided the foundation for extending mine life and sustainable strong cash flow.
During the September quarter, the tailings retreatment at Century enjoyed a record performance – generating A$21.7 million in operational cash flow.
Zinc recoveries were 52% with more than 680,000t of zinc concentrate generated from the tailings to-date.
New Century says the tailings retreatment project provides low-cost metal production from Century through till 2027.
Meanwhile, ongoing exploration to build mineral resource inventories will underpin further mine life to 2030 and beyond.
Through new acquisitions, Mt Lyall and its continued zinc production at Century, New Century plans to take advantage of the strong market fundamentals and outlooks for zinc, copper and other critical minerals.
“The New Century team has a clear focus on its vision to become a global leader in economic rehabilitation and tailings management,” Mr Walta said.