Provide debt financing that will be repaid with precious metals at a steep market discount, for a project that will rehabilitate an environmental hazardThe Business
This Project involves the reclamation and rehabilitation of a Nevada site that contains 10 tailing ponds that were created as the result of strip mining operations for lead over 60 years ago to support the war effort during World War II. The hasty mining process left much of the lead still in the ground as well as completely ignored gold, silver and zinc from the mine tailings, and created an environmental impairment that remains today. The Developer has performed assays of six of the tailing ponds and found large metallic resources at this site (gold, silver, zinc and lead). Based upon recovery processes devised by the Developer’s engineering and metallurgical professionals, the Developer expects to recover 80% of the gold contained in the tailing ponds, 60% of the silver, and 50% of the zinc and lead. The Developer estimates the value of recoverable metals at more than $145 million dollars at current metal market prices.
The Developer has a contract from the United States Bureau of Land Management and processing agreements in place for this Project. More than eight years and over $6 million have already been expended to date to get the Project ready for production. It has assembled a team of experts that can execute all facets of this Project. The Developer is partnering with a mining company to execute the recovery of the precious metals and the reclamation of the tailings ponds. The plan is environmentally appropriate, fully permitted and has no legacy liability.
Market
Because precious metals have risen to sharply higher values in recent years, gold and silver recovered from the site will be the primary focus of extraction methods, and are the only two metals subject to third-party royalties. Zinc and lead can be recovered in far greater quantities. Once the site is fully operational, the Developer expects to process 3,000 tons of tailings per day, with 4.2 million tons of tailings on the entire site.
The Company is seeking an investment of USD 5 million in the form of escrowed debt, to be allocated out of escrow on an agreed-upon schedule. An additional USD 15 million will be deposited into escrow in as few as 60 days, but not to exceed 120 days. The debt will be secured with Project assets, and repaid with .999 gold valued at $660 an ounce (gold is currently trading at more than $1600 an ounce) or cash equivalent.
Sector: MiningSegment: RemediationRegion: North AmericaFinancing Size: $5m to $20mContact: Mike Carpenter
Company: Energy Recovery Group, LLCTelephone: +1 800 979 6453Email: [email protected]