ONTZINC CORPORATION of Toronto is buying the Balmat zinc mine from ZCA Mines Inc. for US$20 million. Payment will be made out of 30% of net cash flow from operations. There is also a clause in the letter of intent allowing that should the price of zinc average US$0.70/lb for two consecutive years, the purchase price will increase by US$5 million. OntZinc assumes no liability for historic operations in the area.
The Balmat mine began operations in 1930 but was placed on standby in May 2001 due to low metal prices. It is located 40 km south of Ogdensburg, N.Y., on the St. Lawrence River and the Canada-U.S. border. Current reserves are 2.0 million tons grading 11.9% Zn plus inferred and indicated resources of 3.1 million tons at 12.9% Zn, according to OntZinc. The property includes a 5,000-ton/day mill built in 1972.
The sale is contingent on court and government approval. For more information contact OntZinc president Thomas Griffis at 416-867-8829.