Star Mountain Resources announced in mid-October that it is acquiring Hudbay’s Balmat zinc mine in upstate New York. Balmat has been on care and maintenance since August 2008. The care and maintenance workforce has kept mining permits current, Mine Safety and Health Administration (MSHA) inspections up-to-date, and environmental controls and conditions in regulatory compliance; and Star Mountain sees no legal or regulatory roadblocks that might delay reopening mining operations.
Balmat produced 335,000 mt of ore grading 6.96% zinc and 38,600 mt of concentrate grading 57.15% zinc in 2007, its last full year of operation.
Star Mountain is a U.S. junior company headquartered in Tempe, Arizona. The company’s total acquisition price for Balmat is 550,000 shares of Star Mountain common stock and up to $17 million in cash, consisting of $1.0 million in cash at closing and future cash payments of up to $15.5 million. A $500,000 payment had already been made to Hudbay at the time of the announcement. Under certain conditions, Star Mountain can accelerate the acquisition payments and reduce the future cash payments to $7 million.
The company expected the transaction to close by the end of October.
The Balmat mining complex includes a permitted and equipped mine, a 5,000-st/d flotation mill, an office complex, and infrastructure to enable the operation of the mine. The acquisition includes 2,699 acres of fee simple real estate and more than 50,000 acres of mineral rights in St. Lawrence and Franklin counties, New York.
Star Mountain President and COO Mark Osterberg said, “We believe there is an excellent opportunity to upgrade and extend the Balmat mineralization through additional surface and underground development and exploration.”
CEO Joe Marchal added, “We are delighted to reach an agreement to acquire the Balmat mine. Reopening of the mine is expected to bring a significant number of jobs to an economically distressed area of northern New York state and jumpstart Star Mountain’s growth into an outstanding new mining company.
“The team we’ve assembled has world-class financial and mining experience that we believe will enable the company to grow into a successful global base metals mining group. I am pleased to welcome Hudbay onto the share register of Star Mountain.”