PRIVATE equity firm Appian Capital Advisory has swooped on Trevali Mining Corp.’s Rosh Pinah zinc mine after the Vancouver firm put assets into liquidation in October.
The mine, located about 800km south of Windhoek in Namibia, has been operating for 54 years during which time it has passed through the hands of several owners – and for some sharply differing values.
Exxaro Resources sold its 50.04% stake in the mine in 2012 to Glencore for R931m. The Swiss headquartered group subsequently booked a massive profit on the sale of 90% stake in Rosh Pinah in 2017 after selling the business to Trevali Mining for $400m.
Appian Capital’s deal is for 89.96% of Rosh Pinah. The balance is held by Namibian empowerment groupings. The acquisition price has not been disclosed but it’s likely to be a basement deal given Trevali’s financial distress.
Trevali put its Perkoa operation in Burkina Faso into liquidation last year. Perkoa, another old grand dame of the mining industry, was once operated by South African mining house, Gencor when it was led by Brian Gilbertson.
Appian said it would return Rosh Pinah to its former glory by increasing annual mill throughput to 1.3 million tons, equal to 170 million pounds of zinc. The mine is currently doing 0.7 million tons annually. The plant has a two million tons a year capacity.
Trevali had previously announced this expansion putting a capital figure of $111m on the exercise. At the time of Exxaro’s sale of Rosh Pinah to Glencore, the mine was producing 178 million pounds of zinc annually.
Appian said it would retain the existing 450-strong site management team and workforce as they had “substantive technical expertise and understanding of the asset”.
Said Michael W Scherb, Appian CEO: “This acquisition marks a significant milestone for Appian as we continue to develop our world-class portfolio of highly attractive zinc assets, a critical metal that will help facilitate the upcoming energy transition”.
The deal to buy Rosh Pinah is Appian’s third investment in zinc. It is pumping A$96m into the Gorno zinc project in northern Italy, held in joint venture with Altamin Ltd. In April, Appian announced a joint venture with Toronto’s Osisko Metals to develop the Pine Point zinc-lead project in Canada’s Northwest Territories.
Zinc prices have recently been under pressure as the interest rate cycle looks to peak. According to S&P Global the zinc price is expected to average $2,968/t between 2024 and 2027 accompanied by narrowing deficits. Demand will peak in 2024 and 2025, it said.