CBH directors support Toho deal to boost Endeavor
Wednesday March 24, 2010
CBH Resources’ board of directors has endorsed an offer from Toho Zinc which would raise enough funds for the company to expand production at Cobar’s Endeavor Mine.
The transaction, announced last week after a takeover bid from Nyrstar Resources, is hoped to be approved at a shareholders meeting in late April.
CBH released a statement last week saying it believed the Nyrstar transaction would not be able to go ahead, with CBH’s major shareholder Toho Zinc declaring it would not support the Nyrstar offer.
CBH managing director Stephen Dennis said the Toho transaction provides “the best of both worlds” for the company.
“Shareholders will be able to receive significant near term gains on a portion of their CBH shares, and they will also have the opportunity to participate in the future growth of the company through the development of the Rasp project and the planned increase in production at the Endeavor Mine,” Mr Dennis said.
Speaking with regional media in a recent teleconference, Mr Dennis said the company is already in the process of stepping up production at Endeavor.
“We expect to commence production at a rate of 850,000 tonnes per annum in July,” Mr Dennis said.
He said the company is expecting to employ an extra 80-85 people at Endeavor over the coming months.
“Cobar went though a lot of pain when our company suffered the downturn, but we made it clear all along that when we were back on our feet we would employ locals.
“We are actively recruiting now and we are looking to Cobar to assist us with sourcing those people,” Mr Dennis said.
He said the company is also focused on building a ‘long-term’ mentality for the mine.
“When we employ someone, it’s going to be for the long term.
“We don’t want to revisit the past and have a ‘stop-start’ situation.”
Mr Dennis said the Endeavor expansion will be positive for the Cobar community.
“Don’t underestimate the ‘multiplier effect’ for the community.
“This will be a much needed boost in confidence for Cobar.”
He explained the company’s new mining strategy for Endeavor, describing it as a “steady-state plan”.
“Around 18 months ago we were running the mine at around 1.2million tonnes per annum.
“When metal prices collapsed we were reduced to around one third of that, and took the opportunity to revise our mining strategy,” Mr Dennis said.
“We now believe the optimum level to run the mine is 850,000 tonnes per annum, with a high grade-low tonnage structure.”
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