Shares of Global Minerals (CVE:CTG) (OTCBB:GMLFF) shot up over 20 per cent Tuesday, after it signed a cooperation agreement with the municipality of Roznava, Slovakia to develop its Strieborná silver project, and also inked a deal to buy a tailings facility adjacent to the planned processing mill site for 2.5 million euros.
The company is looking to advance the undeveloped Strieborná vein in an old mine, adjacent to the previously mined Maria Vein.
Under the terms of the agreement with the City of Roznava, the municipality expressed its support "for all activities benefiting the timely development and permitting of the planned mining operation", while Global Minerals expressed its "commitment to cultural, social and environmental responsibility" and also agreed to support the economic development of the region by providing employment opportunities.
The company said it hopes to create about 120 jobs in mining and ore processing when operations start up at Strieborná.
"This is an important step forward and illustrates the positive relationship between the company and the local community," said CEO Bill Pincus.
"We are fortunate to work in an area with a long mining tradition and those who are keen to see us commence operations to the benefit of the local stakeholders. This agreement is a concrete expression of our mutual collaboration to that effect."
Global Minerals said the capacity of the tailings facility it has acquired is sufficient for five years of production at a proposed rate of 750 tonnes per day.
An additional extension of the tailings dyke is expected to allow for an increase in capacity sufficient for mining of all current resources.
The company will still need to secure some of the permits required to use the facility, but said reinstating it will be "far more efficient both in time and cost" than purchasing and permitting a new facility.
Global Minerals will pay 300,000 euros for the facility on signing, while the balance will be paid in quarterly payments over the next 1.5 years, for a total of 2.5 million euros.
The company noted it had previously purchased enough land to accommodate the future mill and ore processing facilities adjacent to the tailings facility.
Meanwhile, a resource update and economic assessment for the project are "on track", it said, noting that drilling continues from underground and is slated to be wrapped up in the coming months. The drilling has focused on the upper portion of the ore deposit that the company anticipates will be exploited early in the mine life.
All results from the drilling will be incorporated into the updated resource model and economic study, which are expected in the July-September quarter this year.
The high-grade, Strieborná silver-copper vein type deposit is located in an historic mining district near the town of Roznava. The former Mária mine site, which sits on land owned by Global Minerals, provides space for infrastructure and facilities that are necessary for ore processing and tailings disposal. Underground access is also available through the workings of the past producing Maria mine.
Because of the extensive existing infrastructure, the company expects the project could move into production in relatively short order and at a low cost.
Shares of Global Minerals were up 20.45 per cent as at about 11 a.m. EST, trading at 26.5 cents.
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