BALMAT A Montreal company plans to buy the Balmat zinc mine within 90 days.
Beaufield Resources has signed an exclusivity agreement and a non-binding letter of intent with HudBay Minerals to acquire the mine, which HudBay closed in 2008, for a total of $12 million Canadian and up to $2 million Canadian in equity.
An earlier deal for OMT Inc. and New York Zinc, two other Canadian companies, to acquire the mine is dead.
Hudbay will have no more than a 9.9 percent interest in Beaufield, a mineral exploration company whose activity has been focused in Quebec.
Beaufield intends to seek financing for part of the purchase payment and for the restart of the mine if it proves feasible. A decision to begin production has not been made although the company believes the property offers potential, according to a press release issued by Beaufield.
The Balmat mine is a unique opportunity for Beaufields shareholders. Balmat offers a de-risked project and the possibility to become a revenue generator in a reasonable and controllable time frame, Beaufield President Kevin Weston said in the statement. Although the project was not strategic to Hudbay due to its size, I feel it is an excellent building block for Beaufield to enter the ranks of the producing mining companies.