Tinka raises $11 million for zinc-silver project in Peru

Tinka Resources Ltd. [TK-TSXV] has raised $11.12 million from a private placement financing and will use part of the proceeds to advance development at its Ayawilca zinc-silver project in Peru.

Under the terms of the private placement, Tinka issued 50.6 million common shares at 22 cents each.

On May 31, 2022, Tinka shares closed at 19 cents and currently trade in a 52-week range of 28 cents and 13 cents.

Prior to the closing of the private placement, Nexa Resources S.A., the largest zinc producer in Latin America, held 30.5 million shares of Tinka or approximately 9.0% of the shares outstanding on a non-diluted basis. As Nexa subscribed for 40.8 million shares issued in the private placement, it has become a new insider in Tinka, holding 71.3 million common shares or 18.2%.

Compania de Minas Buenaventura SAA, already a company insider, subscribed for 9.8 million common shares in the private placement at the issue price. As a result, Buenaventura now holds 75.6 million common shares of Tinka or 19.3%.

“The closing of the $11 million private placement financing with Nexa and Bueaventura will enable the company to accelerate its work programs and advance Ayawilca as quickly as possible towards development,” said Tinka President and CEO Dr. Graham Carman.

The 150 square kilometre Ayawilca project is located 40 kilometres northwest of Cerro de Pasco in the richly mineralized silver-lead-zinc belt of central Peru. It ranks as one of the largest zinc discoveries made in Peru during the past 20 years.

In October, 2021, Tinka announced the results of an updated preliminary economic assessment (PEA), which contains details of an economic assessment for an underground ramp-access mine development with an 8,500 tonnes per day processing plant.

The PEA envisages average annual production of approximately 155,000 tonnes of zinc in concentrate per year, a scenario that would make Ayawilca the largest primary zinc producer in South America and a top 10 global zinc producer.

PEA highlights include 43.5 million tonnes mined over 14.4 years, using bulk underground mining methods (sub level stoping combined with overhand cut and fill. The initial capital expenditure is pegged at US$264 million.

The project is located in a major mining region close to a paved highway that is under construction, 200 kilometres from an operating zinc refinery and port.

Tinka holds 46,000 hectares of mining claims in Central Peru, making it one of the largest holders of mining claims in the belt.

The company said proceeds of the private placement are also earmarked for early-stage exploration of copper-gold skarn mineral deposits at its 100%-owned Silvia project, which is immediately adjacent to the Ayawilca project. Silvia is also situated 80 kilometres south and along strike from Atamina, one of the largest copper mines in Peru and the world’s biggest skarn deposit.