Key Information:

• Firm commitments received for Placement to raise A$2.550 million before costs:
  • Placement of 63.750 million shares at $0.04 per share, a 7% discount to the last price of $0.043 per share.
  • New shares issued to sophisticated and professional investors under s708 of the Corporations Act.
• Lazarus Corporate Finance acted as lead manager to the Placement:
  • Major existing shareholders, including Copulos Group (subject to shareholder approval), have participated in the Placement.
  • CZL to welcome new institutional and sophisticated investors to the register.
• Funds required primarily to relieve short term cashflow pressure from increased levels of run-of-mine inventory:
  • Inventory increases due to operational issues at third-party processing facility since November 2020.
  • Excess funds to be applied towards general working capital and offer costs.
• Wholly owned Plomosas process plant refurbishment on track to commence commissioning during February 2021.
• Once the Plomosas plant is operational, the Company expects to quickly reduce the stockpiles to normal levels through the utilisation of both the Plomosas and Aldama processing plants.

Consolidated Zinc Limited (“Company“) (ASX:CZL) is pleased to advise that it has received firm commitments from sophisticated and professional investors pursuant to section 708 of the Corporations Act 2001 (Cth) to raise $2.550 million before costs, via a placement of 63.750 million fully paid ordinary shares (“Placement Shares“) in the Company (“Placement“).

Funds raised from the Placement will be applied towards working capital whilst the Company realises the value held in increased levels of run-of-mine inventory at the Plomosas Mine, commissioning of the refurbished wholly owned Plomosas Processing Plant, general working capital and offer costs.

Managing Director Mr. Brad Marwood said “While ore continued to be processed through the third party Aldama plant over the recent quarter, limited availability of the plant meant that not all ore that was mined was able to be processed which has resulted in a short term working capital shortfall. However, the value of stockpile inventories continued to increase during the fourth quarter of 2020 and into January 2021.

The refurbishment of the company’s wholly owned Plomosas processing plant proceeds well and is on track for first commissioning during February 2021. The mill has been installed and is ready for commissioning, the tailing storage facility is near completed and the wet end of the plant is expected to be completed in the next few weeks. Following commissioning of the Plomosas processing plant, the Company will have full control of both the mining and processing functions. Coupled with new equipment and the recently appointed maintenance manager as noted in the December quarterly report, the Company expects improved returns going forward.”

The mill purchased and installed at Plomosas has a nameplate ore processing capacity of 200 tonnes per day, however, the remainder of the Plomosas plant refurbishment is being refurbished at 100 tonnes per day. The Company will evaluate the business plan to bring forward the Plomosas plant expansion to 200 tonnes per day (equivalent to 72,000 tonnes per year) once the refurbishment of the Plomosas plant has reached steady state operations.

Details of the Placement

The Placement was undertaken at an issue price of $0.04 per Share which is a 7% discount to the last traded price on 10 February 2021 of $0.043 per Share.

The Placement Shares (other than Copulos Group’s participation, refer below) will be issued under the Company’s existing ASX Listing Rule 7.1 and 7.1A capacity with settlement expected to occur on or around Thursday 18 February 2021 with allotment on or around Friday 19 February 2021.

Major shareholder, Copulos Group, has committed to purchase 7,500,000 Shares ($300,00) under the Placement (“Copulos Placement Participation“). The Copulos Placement Participation is subject to shareholder approval under ASX Listing Rule 10.11, as the Copulos Group is deemed to be a person of influence, given it held a greater than 30% shareholding in the preceding 6 months. Shareholder approval will be sought at the Company’s AGM to be held in late May 2021, with the notice of meeting expected to be sent to shareholders in the coming months.

Copulos Group’s holding pre-Placement was 34.53% and post Placement assuming shareholder approval is granted, will be 29.72%.

The Company expects that the Placement Shares (following approval by shareholders at the AGM, if applicable) will be listed for trading on the ASX immediately after issue, subject to ASX Listing Rule requirements, following the issue of a cleansing statement.

Lazarus Corporate Finance Pty Ltd acted as the Lead Manager to the Placement and will be paid a management and capital raising fee totalling 6.0% of gross funds raised (plus GST).

This announcement was authorised for issue to the ASX by the Directors of the Company.

For further information please contact:

Brad Marwood
Managing Director
08 9322 3406

ABOUT CONSOLIDATED ZINC

Consolidated Zinc Limited (ASX: CZL) owns 100% of the historic Plomosas Mine, located 120km from Chihuahua City, CHihuahua State. Chihuahua State has a strong mining sector with other large base and precious metal projects in operation within the state. Historical mining at Plomosas between 1945 and 1974 extracted over 2 million tonnes of ore grading 22% Zn+Pb and over 80g/t Ag. Only small-scale mining continued to the present day and the mineralised zones remain open at depth and along strike.

The company has recommenced mining at Plomosas and is committed to exploit the potential of the high-grade Zinc, Lead and Silver Minerals Resource through the identification, exploration and exploitation of new zones of mineralisation within and adjacent to the known mineralisation with a view to identify new mineral resources that are exploitable.

Caution Regarding Forward Looking Statements and Forward-Looking Information:

This report contains forward looking statements and forward-looking information, which are based on assumptions and judgments of management regarding future events and results. Such forward-looking statements and forward-looking information involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the actual market prices of zinc and lead, the actual results of current exploration, the availability of debt and equity financing, the volatility in global financial markets, the actual results of future mining, processing and development activities, receipt of regulatory approvals as and when required and changes in project parameters as plans continue to be evaluated.

Except as required by law or regulation (including the ASX Listing Rules), Consolidated Zinc undertakes no obligation to provide any additional or updated information whether as a result of new information, future events or results or otherwise. Indications of, and guidance or outlook on, future earnings or financial position or performance are also forward-looking statements.

Original Article: https://www.listcorp.com/asx/czl/consolidated-zinc-limited/news/czl-placement-to-finish-wholly-owned-plant-2505236.html