Canarc Leases Permitted La Plata Processing Plant in Zacatecas, Mexico
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Canarc Resource Corp. has signed a definitive agreement with the Zacatecas state government to lease and operate the permitted 500 tonne per day La Plata ore processing plant in the city of Zacatecas, Mexico, through its wholly owned Mexican subsidiary, Minera Oro Silver.
Canarc plans to use the plant for processing ore from the company’s recently acquired and permitted El Compas Mine, located 20 kilometers away from the plant by road. Canarc also agreed to reserve up to 100 tonnes per day for toll milling of ores produced by local small miners in the area.
Lease Agreement Highlights
• Lease term is 5 years with the right to extend for another 5 years
• Canarc assumed responsibility for the plant as of January 29, 2016
• Plant will be exclusively operated by Canarc’s Mexican subsidiary, Minera Oro Silver,
• Canarc will pay a monthly lease payment of 136,000 Mexican Pesos, approximately US$7,500
• Grace period of 6 months to allow time for plant refurbishing
• Power and water are available for plant operations
• Plant capacity is 500 tonnes per day with possibility to expand
• Permitted tailings facilities has a current capacity for approximately 1 million tonnes
• Certain plant refurbishment costs will be reimbursed to Canarc by lease payment offsets
The plant was constructed by the Zacatecas state government in September 2013 for processing minerals available from local small miners in the state. The plant last operated in October 2014 and it remains a fully permitted crushing, grinding, flotation, and tailings facility.
Canarc technical staff inspected the plant equipment and found it to be in generally good condition but it requires approximately US$1 million in capital investment to refurbish certain pieces of equipment and recommence operations.
Lease Agreement Advantages
• Provides Canarc with a clear path to near-term production from the El Compas project
• Eliminates the substantial capital cost, risk and time required to permit and build a plant and tailings facility
• Agreements are already in place for power and water to support plant operations
• Zacatecas is a mining center with a ready supply of mining professionals and workers skilled in mine and plant operations
• Significantly shortens the project schedule and reduces completion risks for production in 2016
• Will provide Canarc with additional revenue from processing of local small miners’ ores
Canarc will now turn its focus to arranging the estimated US$8 million in pre-production capital financing needed to develop the mine, refurbish the plant, and commence production. Discussions with several groups are now underway.
“Today’s announcement marks the completion of yet another key step forward by Canarc to transition into a producing gold-silver mining company during 2016. With the lease agreement and PEA now complete, we are now focused on arranging the financing required to develop the mine to production this year,” said Catalin Chiloflischi, CEO of Canarc.
About Canarc Resource Corp.
Canarc is a growth-oriented, gold exploration and mining company. The company is currently focused on advancing its high grade, underground El Compas gold-silver mine in Zacatecas, Mexico to production. Canarc also owns the high grade, New Polaris gold mine project in BC, Canada and is seeking a partner to drill its prospective Windfall Hills gold property in BC.
To stop by Canarc’s website, CLICK HERE
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