Attila In Company-Making Zinc Deal On Century

By Barry Fitzgerald | More Articles by Barry Fitzgerald

There is a whole bunch of ASX-listed junior zinc developers jostling for market attention as the prices for the galvanising metal continues its merry run in to 2017.

But the lot of them have been gazumped by Attila Resources (ASX:AYA), a listed shell which has pulled off a company-making deal, one that could quickly establish it as a global Top 10 zinc producer – a nice ranking to have given the zinc price continues to shine at $US2,812 a tonne – up 34 per cent on last (calendar) year’s average of $US2,094 a tonne.

Attila is to pony up with Patrick Walta’s Raging Bull Mining, a privately held mineral processing specialist with an “economic rehabilitation’’ bent, to return the Century zinc operation in north Queensland to production as a tailings retreatment operation, possibly as early as late next year.

It was Raging Bull which struck a deal to acquire Century and all of its associated infrastructure assets from MMG, with Attila subsequently striking a deal to acquire an initial 70 per cent interest from Raging Bull for 30m Attila options, a royalty, and sole funding responsibilities of $A10m over the first three years, subject to shareholder approval.

The Chinese-controlled, Hong Long-listed, and Australian-managed MMG mined its last ore at Century in late 2015 and processing came to an end in early 2016. Over its 16 years in production, Century was one of the world’s biggest zinc producers, with average annual production of 475,000 tonnes of zinc and 50,000 tonnes of lead.

Somewhat ironically, it was the closure of Century on its orebody being mined out, and the closure of some other notable zinc mines overseas, that has been one of the key factors in zinc’s price surge.

Long-term planning by MMG for Century’s closure envisaged capping the tailings dam at a cost of about $US100 million. But that would have locked away $US7 billion of zinc (before retreatment costs and ignoring metal recovery rates) in the tailings (71 million tonnes grading 2.73 per cent zinc for 1.94 million tonnes of contained zinc).

A number of metallurgical studies pointed to the potential for the recovery of about 50 per cent of the zinc in a reprocessing operation using the existing processing plant (7 million tonnes-a-year), but with some modifications that would likely cost somewhere between $US50-$US100m, all of which needs to be confirmed in more studies.

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About Barry Fitzgerald

Barry Fitzgerald has covered the resources industry for 30 years. His column highlights the issues, opportunities and challenges for small and mid-cap resources stocks - most recently penned his column for The Australian newspaper and before that, The Age.

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