VANCOUVER (miningweekly.com) – TSX-V-listed project developer Rathdowny Resources has closed a C$6.9-million private placement, which will be used to further advance permitting of the company’s flagship Olza zinc/lead/silver project, in Poland.

The Vancouver-based junior has also entered an unsecured C$30 000 debenture with an unrelated lender to use for corporate purposes. The debenture bears a coupon of 12% and will mature on February 24, 2019.

Under terms of the private placement, Rathdowney issued 36.31-million units, each comprising a common share valued at C$0.19 apiece and a common share purchase warrant with a strike price of C$0.24 apiece, valid for two years.

Rathdowny is focused on refining engineering work to progress the Olza project towards feasibility stage.

"Project Olza is located in a proven mining district and Rathdowney now has a clear and exclusive pathway towards an exploitation concession. With a significant financing completed, the company will refocus its efforts toward achieving that objective,” stated chairperson David Copeland.

Located in the Upper Silesian mining district of southwestern Poland, a world-class region of Mississippi Valley-type zinc/lead deposits, a 2015 preliminary economic assessment (PEA) based on the 24.4-million tonnes in the 2014 resource estimate showed strong potential financial returns, including an after-tax internal rate of return of 30% and payback of 2.4 years.

Development, as described in the PEA, will include a 6 000 t/d low-cost, bulk-tonnage underground operation and conventional treatment facility, producing two clean, low-iron, marketable concentrates, a scenario like the long-life Pomorzany mine. 

The Olza development would use existing, well-developed infrastructure in the district, including on-site rail that provides direct access to European smelters, ports and markets, as well as roads and power facilities. Skilled technical trade workers and other contractors are also available in the region. All-in, on-site operating costs are estimated to be $47.42/t and, when provisions for shipping, handling and other off-site treatment are included, the PEA estimates an all-in cost of $0.63/lb of zinc.

Since completion of the PEA, Rathdowney has completed additional drilling to collect geotechnical data for continued planning of underground infrastructure and to further test the mineral resources. This work indicated potential to expand the mineral resources and extend the mine life from that project in the 2015 PEA.

Rathdowney's drilling from 2011 to 2014 has confirmed an inferred mineral resources of 24.4-million tonnes grading 7.02% zinc and lead, at a 2% zinc cutoff in a portion of the project area. Historic work in the area included exploration undertaken by the Polish State Geological Institute in 1990, estimating some 77-million tonnes grading 6.15% zinc and lead in the immediate project Olza area, following drill programmes in the 1950s to 1980s.