Top End Minerals Ltd (ASX:TND) has acquired an option to purchase a 60% interest in the Longh Keng zinc mine and Lashio zinc refinery in Myanmar for US$43 million.
The assets are held by Cornerstone Resources (Myanmar) Ltd and Top End has paid an upfront non-refundable deposit of US$500,000 for the nine-month option agreement.
The 8 square kilometre mining lease hosts two high grade zinc outcrops, collectively containing a non-JORC inferred resource of circa 171,194 tonnes grading 36.84% zinc.
The refinery plant currently produces 10,000 tonnes of refined zinc per annum and is the only modern zinc refinery within Myanmar’s prospective zinc and base metal province.
Top End has completed a $2.2 million share placement to fund the option purchase. In addition, Yandal Investments, affiliated with legendary prospector Mark Creasy, has agreed to invest A$500,000.
Option agreement details
Top End has secured a nine month option with the holding company’s major shareholders, China’s Datong Industrial Co and Mark Creasy’s Yandal Investments.
The non-refundable deposit of US$500,000 grants Top End the option to purchase 60% of the holding company for US$43 million.
Assets
The Longh Keng zinc mine is situated 450 kilometres north east of Yangon.
The mining lease covers 8 square kilometres and hosts two high grade zinc outcrops, collectively containing an inferred non-JORC resource of circa 171,194 tonnes of ore at an average grade of 36.84% zinc for a total of 63,066 tonnes of contained zinc.
The Lashio zinc refinery is situated 700 kilometres north east of Yangon and the plant was commissioned in February 2015.
It currently produces 10,000 tonnes of 99.99% refined zinc per annum.
Plans to increase capacity to 18,000 tonnes per annum are currently under discussion.
Future upside potential
In addition to the potential exploration upside at Longh Keng is the proximity to the former world-class Bawdwin mine and Namtu smelter complex.
It has 2.3 million tonnes of zinc rich slags with an average grade of 17% zinc, which provides an opportunity for the Lashio zinc refinery to source additional feedstock for the long term.
Placement details
A $2.2 million placement has been completed through the issue of 100 million shares priced at $0.022.
The funds raised will be used to fund the non-refundable deposit, provide working capital for activities in Myanmar and fund exploration of Top End’s Northern Territory zinc project.
Top End will immediately commence discussions with interested parties on the proposed funding required to acquire the 60% interest.
Analysis
Not only does this option agreement provide Top End with the opportunity to become a near-term zinc producer, it will have an interest in one of the highest grade ore projects in the world.
Shares have spiked as much as 75% intra-day, currently trading at $0.049.
Together with major Chinese partner, Datong, Top End has a unique opportunity to acquire other major zinc and base metal assets and exploration tenements in Myanmar.
Following changes in Myanmar’s political landscape and the recent lifting of U.S. and E.U. sanctions, Myanmar has the potential to be a major attraction for mining investment due to its significant geological setting and untapped potential.
Source: The Proactive Investors Australia
