Newera to proceed with zinc project buy

Perth-based minerals explorer Newera Resources will proceed with its proposed acquisition of Arena Exploration in order to own a substantial proportion of the Plomosas zinc project in Mexico, following the completion of due diligence.

In a statement today, Newera said has moved ahead with plans to spend $150,000 to wholly acquire Arena and, in turn, has exercised its option to acquire an initial 51 per cent stake in the Plomosas project for $1.9 million in cash and shares.

Newera also has the option to increase its stake in the project to at least 90 per cent by paying a further $3.25 million in cash and shares within three years.

The due diligence report anticipated capital and operating costs to be low on a global comparison and in line with other operations in the region.

Newera said Copulos Group, which holds a 15 per cent stake in the company, agreed to provide $1.25 million by way of a convertible note facility in order to partially fund the initial acquisition.

“That will convert to equity at the same time and same price as the company’s next capital raising,” Newera said.

Newera will be required to complete a $4 million capital raising as part of the acquisition.

Chief executive Will Dix said the Plomosas project was the perfect asset to take advantage of the optimistic outlook for zinc.

Following a capital raising and shareholder approval, Newera said it plans to initiate an in-mine exploration program to identify easily accessible ore close to current mine workings and establish a JORC resource.

The Plomosas project covers 11 exploration and exploitation concessions totalling 3,019 hectares of land.

Newera shares closed 50 per cent higher at 0.3 cents per share.