Mining and commodities trader giant
Glencore (LON: GLEN) has taken a small stake in an Irish zinc project located
next to its own Pallas Green lead-zinc development by investing
C$1 million in Group Eleven Resources’ (TSX-V: ZNG) Stonepark
deposit.
Glencore’s funding gets it an 11.58% stake in the Canadian explorer, which co-owns the Stonepark deposit with Irish gold and zinc junior Arkle Resources.
Stonepark is located next to Glencore’s own Pallas Green lead-zinc development.
“We are excited to have Glencore
join our group of strategic shareholders,” chief executive of Group Eleven, Bart
Jaworski, said. “Glencore’s extensive experience in Ireland, especially at
the Pallas Green zinc project, will provide an important dimension to Group
Eleven’s ‘Big Think’ strategy.”
The asset, located in Ireland’s southwest county of Limerick, is a 5.1 million-tonne zinc deposit grading 8.7% zinc and 2.6% lead in the Inferred resource category.
The deal sees Glencore Canada
purchasing 8.4 million units of Group Eleven priced at C$0.12 each for a
total consideration of just over C$1 million, an equity ownership of 11.6%.
Each unit consists of one share and
one half of one warrant exercisable at C$0.24 each for 35 months following the
closing date.
Glencore, one of the world’s
largest zinc producers, also has the right to add one member to Group Eleven’s
board and participate pro-rata in future financings, provided its ownership
remains above 10%.
Ireland is one of Europe’s largest
zinc producers and host to some of the world’s largest deposits of the metal.
Zinc’s primary market is for
strengthening steel. In 2016, commodities analysts began warning of a looming
zinc shortage and soaring prices. In 2018, it hit $1.60 per pound, but it has
since dropped to about $1 per pound.