All dollar amounts are in U.S. dollars unless otherwise indicated.
TORONTO, Nov. 21, 2016 /CNW/ - LeadFX Inc. (the "Company" or "LeadFX") (TSX: LFX) announced today that it has received favourable changes to the Paroo Station Mine's (the "Mine") operating conditions. It has also received a $1 million unsecured, interest-free loan from Sentient Global Resource Fund IV, LP ("Sentient") to help meet its working capital needs.
Paroo Station Mine Update
After an extensive consultation process, LeadFX is pleased to announce that it has received a seven-year extension for access to the Port of Fremantle to export lead concentrate using the Company's best-practice concentrate transportation process. LeadFX exports its concentrate in sealed double-lined bags in locked shipping containers. Securing port access is a critical step in the preparations for a potential restart of the Paroo Station Mine in Western Australia.
Pursuant to an amendment made to Ministerial Statement 905, the Mine's key operating conditions (the "Operating Conditions"), the Company is now permitted to ship through the Port of Fremantle until July 27, 2024. In addition, the Operating Conditions were also amended to reduce the quantum of the financial assurance bond that the Company must have in place during transport operations, from A$5 million to A$2 million, to be in line with the with the worst-case clean-up scenario developed by independent transportation experts. The Company considered the receipt of these amendments to its Operating Conditions as important preconditions to any decision to restart the Mine. With these amendments approved, the Company can now move forward with its Mine restart financing discussions.
In 2014, its last full year of operations, the Mine produced approximately 81,000 tonnes of contained lead in concentrate and employed more than 200 employees and contractors.
Unsecured Promissory Note
Sentient has advanced LeadFX $1 million pursuant to an unsecured, interest-free, promissory note (the "Note"), repayable on June 30, 2017 and on the same terms as the prior promissory notes issued by the Company to Sentient. The interest-free advance by Sentient will enable the Mine to remain in a restart-ready state prior to a decision being made on a restart of the Mine in the coming months.
Rob Scargill, President and CEO said, "Recent LME lead prices are more than 20% higher than such prices when we placed the Paroo Station mine on care and maintenance in January 2015. The extension of the port access removes a significant hurdle to a restart, and with the ongoing support of Sentient we are now focused on securing appropriate restart financing prior to a restart decision."
LeadFX is a Canadian-based mining company focused on the development of lead-silver projects located in stable jurisdictions. Our current portfolio includes a restart-ready lead operation in Western Australia and a development project in Utah, USA. The Company is developing opportunities at its new properties in North America to underpin future cash flow and growth. LeadFX trades under the symbol "LFX" on the Toronto Stock Exchange.
This news release may contain "forward-looking statements" within the meaning of applicable Canadian securities laws. Examples of forward-looking information in this news release includes but is not limited to statements and information concerning the closing of the loan with Sentient, receipt of necessary approvals for the issuance of the Note, the intended use of proceeds of the Note, the timing for a decision on restart of the Mine, a potential restart of the Mine, the period of time to ramp-up operations at the Mine following any restart decision, the ability to secure restart financing and future LME lead price outlook. Forward-looking statements are often, but not always, identified by the use of words such as ''seek'', ''anticipate'', ''contemplate'', ''target'', ''believe'', ''plan'', ''estimate'', ''expect'', and ''intend'' and statements that an event or result ''may'', ''will'', ''can'', ''should'', ''could'' or ''might'' occur or be achieved and other similar expressions. Forward-looking information by its nature requires assumptions and involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information, and readers are cautioned not to place undue reliance on such information. These statements are based upon certain reasonable factors, assumptions and analyses made by management in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. However, whether actual results and developments will conform with management's expectations is subject to a number of risks and uncertainties, including, uneconomic LME lead prices, treatment charges and/or exchange rates; the inability to meet or refinance our commitments to our current lenders; the inability to meet ongoing costs of care and maintenance and other working capital requirements; the inability to secure restart financing; lack of sufficient demand for our lead carbonate concentrate by an offtake party or other customers; and the inability to secure employees and contractors in a timely manner for a restart. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievement may vary materially from those expressed or implied by the forward-looking information contained in this news release. These risk factors should be carefully considered and readers are cautioned not to place undue reliance on forward-looking information, which is current only as of the date of this news release. All subsequent forward-looking information attributable to LeadFX herein is expressly qualified in its entirety by the cautionary statements contained in or referred to herein. LeadFX does not undertake any obligation to release publicly any revisions to this forward-looking information to reflect events or circumstances that occur after the date of this news release or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.
SOURCE LeadFX Inc.
For further information: LeadFX Inc., Jessica Helm, VP, Corporate Communications and Investor Relations, Suite 3001, 1 Adelaide Street East, Toronto, Ontario M5C 2V9, (416) 867 9298, Email: [email protected]