Altamin’s Gorno zinc play up in lights as Appian signs off on $103m JV
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Development of Altamin’s advanced Gorno zinc project in Italy has taken a major step forward after execution of a binding $103m subscription and joint venture agreement.
Under the agreement with Appian Italy BV, which replaces the term sheet announced in July this year, Altamin (ASX:AZI) will transfer Gorno to a newly incorporated joint venture company Vedra Metals SRL .
Appian can then invest up to $103m (US$65m) to earn up to 67.4% interest in Vedra.
Th initial committed investment tranche of $15.9m (US$10m) positions the company to embark on a significantly expanded exploration program with more than 20,000m of infill and exploration drilling planned, permitting and then completion of a definitive feasibility study , with Appian to earn up to 29.9%.
Appian can then fund a further $87.3m (US$55m) for project construction following a final investment decision (FID) to earn a further 37.5% in Vedra – and the Gorno project.
Altamin will share management of the project with Appian prior to FID. The company anticipates it will retain a 32.6% interest in Gorno once it has been funded to commercial production based on the November 2021 Scoping Study parameters.
“This funding and JV partnership positions us to quickly commence remobilisation of our drilling contractor to embark upon the largest drilling program ever initiated at Gorno. With the huge battery metals demand in Europe right now and the expectation that the EU’s energy transition needs alone will increase its zinc usage by up to 15%, we are thrilled to be playing a role in assisting the transition,” Altamin managing director Geraint Harris said.
“Altamin and Appian share the vision of significant additional resource potential at Gorno and the ability of this mine to make an important contribution to local prosperity and to supply a clean and sustainable source of concentrates for European smelters long into the future. Our JV agreement with Appian marks a key milestone confirming Italy as a mining jurisdiction and we are excited to be a contributor to the growing efforts to secure the raw material supply chain in Europe,” he added.
Appian’s founder and chief executive officer, Michael Scherb, said that “Gorno is a high-quality asset with a highly prospective resource and strong local support and that Appian was pleased to solidify its partnership with Altamin and deliver the full potential of the project”.
Gorno is a previously producing high-grade, underground mine located in a historic zinc and lead mining province, but has been idle since 1982.
The current Gorno resource of 7.8 million tonnes grading 6.8% zinc, 1.8% lead and 32 grams per tonne silver underpins the Scoping Study which provides estimates of a post-tax net present value (NPV 8 ) of US$211m and post-tax internal rate of return (IRR) of US$50m – both measures of a project’s expected profitability.
Initial Capex was estimated at a very manageable US$114m with payback estimated within 2.5 years and a mine life of nine years. All-in sustaining costs are estimated at US$0.60c per pound of zinc equivalent.
This article was developed in collaboration with Altamin, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.