Symbol Mining inks offtake deal for its Nigerian zinc and lead project
Metals explorer Symbol Mining (ASX: SL1) has executed an offtake and marketing deal with Noble Resources International for the shipping and sale of high grade zinc and lead from its 60%-owned Imperial project in Nigeria.
Under the agreement, Singapore-based Noble has been granted partial rights to market product for the life of any mines owned and operated by the Imperial Joint Venture, where Symbol is partnered 60/40 with Nigeria’s Goidel Resources.
In addition, the deal locks in the final funding requirements for the development of the project’s Macy zinc and lead deposit with a short term US$3 million loan facility.
Full scale mining commenced at the Macy project this month following the approval of a mining lease.
According to Symbol, the project is on track for its first shipment of high-grade zinc and lead product by the end of the 2018 third quarter.
Symbol chief executive Tim Wither said the offtake deal allowed the company to leverage on Noble’s strong and established customer base.
“Execution of the offtake agreement and securing the final funding requirements for Macy demonstrates the continued support of Symbol’s strategy of securing early high margin cash flow from the Imperial joint venture, aggressive exploration of future resources and expanding our current asset portfolio across Nigeria,” he said.
The US$3 million loan facility has been provided to the Imperial Joint Venture for a period of up to 12 months, expiring on 1 July 2019. Imperial has granted Noble increased offtake rights for the term of the facility.
Macy project
The Imperial Joint Venture comprises three exploration licences spanning 510sq km in Nigeria. The area includes the Macy deposit, where recent estimates have shown an indicated and inferred JORC resource of 132,700 tonnes grading at 18.3% zinc and 2.1% lead.
According to Symbol, the Macy project is the first industrial-scale mining operation in the country for several years.
After a “relatively short” development period, the project is expected to generate sufficient cashflow to repay debt and provide ongoing funding for Symbol’s exploration activities.
Based on indicative offers, smelter discussions and the continuing market conditions, the company said it did not anticipate any difficulties in achieving a fully sold position for the foreseeable future.
Shares in Symbol rose by 10.71% to A$0.031 by afternoon trade.