Telson Mining Corporation arranges $25m gold mine financing
Canada-based Telson Mining Corporation has arranged $25 million financing to restart the construction and ramp up of its fully owned Tahuehueto Gold mine project with pre-production targeted within 10-12 months and full scale production within 12-14 months.
A LoI was signed with Accendo Banco S.A. de C.V ($12 million loan), Empress Royalty Corp. ($5 million) and Endeavour Financial ($8 million equity private placement, due to close first week of March).
Telson, Accendo Syndicate and Trafigura Mexico S.A. de C.V. have also executed an MoU that provides a non-binding framework with terms to be used by the parties to negotiate the potential entry into the Definitive Agreements of the proposed transactions.
Capex required to complete mine construction and commissioning is estimated at $15.4 million which includes $12.6 million for equipment and construction, including a 15% contingency, plus $2.8 million of working capital to support operations until the mine achieves positive cashflow, following a proposed three-year payback period.
Tahuehueto, located in Mexico's north-western Durango State, will produce gold, silver, lead, and zinc in concentrates within its own on-site mineral processing facility, and has a designed capacity of at least 1,000 tonnes per day. It consists of 28 mining concessions grouped into five non-contiguous blocks that total approximately 7,492 hectares.
In addition, Telson Mining has announced the retention of Peak Investor Marketing Corp., a boutique firm which provides full-service marketing and consulting services focused on the junior mining sector. The contract is for one year, with a fee of $12,000 per month.
Peak will also receive 300,000 stock options vested over 12 months (as to one-quarter every 3 months), in accordance with the terms of the Company’s stock option plan, at the time of the Company’s next option grants, at a price to be determined.
Operations at Campo Morado - a polymetallic base metal mine - during Q4 2020 showed a steady increase in production with December throughput production increasing to 57,081 tonnes of mineralized material processed, resulting in 3,756 tonnes of zinc concentrate and 740 tonnes of lead concentrate for the month. Estimated revenues for the quarter, net of all concentrate sale deductions such as treatment charges and penalties, were approximately US$8,766,889.
All transactions are subject to TSX Venture Exchange approval.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.