Toronto, 2 June 2011
Xstrata Zinc has entered into a binding agreement with Sabina Gold and Silver Corporation to purchase the Hackett River and Wishbone exploration properties in the Western Kitikmeot region of Nunavut, North Canada.
Exploration drilling in Hackett River is underway and has confirmed an NI 43-101 compliant resource of circa 60 million tonnes of ore containing zinc, silver, copper, lead and gold, with approximately 5.2 million tonnes of zinc equivalent, housed within four proximal near surface deposits amenable to open pit mining. Both properties contain significant additional exploration potential.
The Hackett River property comprises nine mineral leases totaling 12,250 hectares. The Wishbone area comprises 132 mineral claims covering 107,227 hectares.
Under the terms of the agreement, Xstrata will pay a cash consideration of C$50 million and will grant a silver royalty to acquire the properties. Additionally, Xstrata will commit a further C$50 million in exploration and to complete a bankable feasibility study within four years of the transaction’s closing.
Xstrata Zinc Canada Chief Operating Officer Manuel Alvarez commented: “This transaction, added to the extension of the life of our Brunswick Mine and the development of the Bracemac-McLeod Mine, is consistent with our strategy of increasing the life of Xstrata Zinc’s operations in Canada and demonstrates Xstrata Zinc’s commitment to a growing presence in the country. We now look forward to working with local stakeholders in Nunavut in the coming years as this project moves forward.”
Xstrata Zinc Chief Executive and Xstrata plc Executive Director Santiago Zaldumbide added: "The prospective Hackett River and Wishbone exploration properties are early stage opportunities that could provide additional mined zinc production to complement our Canadian operations. This transaction is aligned with our commitment to continuously seek value enhancing projects for Xstrata Zinc, the world’s leading integrated producer of zinc, and provides us with entry into a highly prospective region.”
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Xstrata Zinc Canada
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ABOUT XSTRATA ZINC
Headquartered in Madrid, Spain, Xstrata Zinc is one of the world’s largest producers of zinc and one of the commodity business units within the major global diversified mining group Xstrata plc. Xstrata’s zinc and lead operations and exploration projects are located in Australia, Canada, Germany, Peru, Spain and the United Kingdom.
Xstrata Zinc’s operations in Spain comprise the San Juan de Nieva zinc smelter and the Arnao zinc semis plant in Asturias, and the Hinojedo roasting plant in Cantabria.
In Australia, operations comprise: the Mount Isa, George Fisher underground, Handlebar Hill open cut and Black Star open cut zinc-lead mines, zinc-lead concentrator, lead smelter and Bowen Coke Works in north Queensland; and the McArthur River open pit zinc-lead mine, processing and loading facility in the Northern Territory.
In Canada, operations and exploration projects include the Brunswick zinc-lead mine, and the Brunswick Lead smelter and recycling facilities in New Brunswick; the Perseverance zinc mine and the Bracemac McLeod mine development in Quebec and the General Smelting facilities and 25% of the CEZ zinc smelter near Montreal.
Xstrata Zinc also operates the Nordenham zinc smelter in northern Germany; the Northfleet lead refinery in the United Kingdom; and owns 33.75% of the Antamina mine in Peru.
Around half of all zinc currently consumed is used for galvanizing steel, which is an environmentally friendly method of protecting steel against corrosion. Zinc also finds application in the manufacture of die-cast alloys, brass and the production of zinc oxides and chemicals.