News: PLD Corporation to acquire world class zinc project

PLD Corporation (ASX:PLD) should trade substantially higher after it signed an option agreement to acquire the Admiral Bay Project, considered one of the world’s more significant undeveloped zinc deposits, located in the Canning Basin, Western Australia.

In August 2008, previous owners published an Inferred Mineral Resource estimate for the Admiral Bay Project of 72Mt at 3.1% zinc, 2.9% lead, 18 g/t silver and 11% barium within a 2.1 kilometre zone of an 18 kilometre strike extent.

This 18 kilometre strike has only partially been drill tested. Mineralisation has been shown to produce a premium coarse-grained zinc concentrate.

The comprehensive exploration, development and mining database has had over $35 million invested by CRA Exploration and Kagara Limited (ASX:KZL).

The acquisition is subject to shareholder approval and re-compliance with Chapters 1 & 2 of the ASX listing rules.

PLD signed the agreement with Kagara to acquire Admiral Bay via a combination of cash and shares, including $30,000 cash for an exclusive three month due diligence period.

The remaining consideration is $1 million in cash and convertible notes, and up to $6 million in milestone payments, where PLD can buy back a 1.5% NSR issued to Kagara.

Zinc is the fourth most used metal in the world, with China’s consumption growing rapidly. Given that the economy currently uses only a quarter of the zinc used in western economies, that consumption will very likely grow as more steel is galvanised for production.

The project area is well located, being only 70 kilometres east of the Great Northern Highway that connects Port Hedland to Broome.

Power is present nearby with the Broome Natural Gas Pipeline servicing the West Kimberley Power Project, and the ports of Broome and Derby provide export options.

PLD is also anticipating results shortly from the electromagnetic survey and drilling at its Rocky Gully nickel-copper project, located in the Albany Fraser Belt.