RE:RE:RE:NEWS- PEA completed for Olza Zn-Lb Project in PolandYeah I would assume this is a buy out play, not a take it to production play. But it's impossible to know what will ultimately happen especially given the junior resource market in general.
Unless Staalprodukt wants to shut down their smelter complex 3-4 years after they bought it from ZGH Boleslaw their only source of nearby feed will be Olza. They could source feed elsewhere, but it'll be way less economical for all parties involved. Olza is the only sensible long-term solution.
Arcellormittal only owns 1/3 of Staalprodukt right now, but I'd bet that's just a hedge. Pomorzany will run out of resource next year and Olza just released a PEA today. There's no sense is owning 100% of Staalprodukt if Olza doesn't pan out. I would bet that if Olza gets its permits and has an economically favorable FS you'll see Arcellormittal take 100% ownership of Staalprodukt and Rathdowney.
Arcellormittal is taking a bit of a beating these days due to the decline in the steel market (their credit was downgraded recently), but the amount of refined zinc Staalprodukt could produce assuming Staalprodukt operates at 100% capacity is still only a fraction of their zinc consumption, so they're unlikely to under-consume their zinc supply. It makes sense for them to continue to profit from their own zinc consumption.
Olza is mid-size as far as proposed production rates go which makes it rare in the zinc space. There are a couple of large projects in the zinc mining pipeline and quite a few small scale projects (2000 tpd or less). Olza's in a bit of a sweet spot.
If the zinc story is real and we see precious metals recover (further reducing opex) shareholders who got in at these levels will do extremely well.