LSE-listed Pembridge Resources has signed definitive heads of terms with a global Japanese trading house to receive $30-million in prepayment financing through an offtake financing agreement for 125 000 t of copper concentrate to be produced at the Minto copper/gold/silver mine, in Canada.
The agreement, which is subject to certain conditions, allows Pembridge to sell concentrate from Minto at the mine gate, which eliminates the historically large working capital requirements when the site is unable to transport concentrate owing to seasonal weather conditions.
The financing and offtake agreement is subject to, among other things, the satisfaction of certain customary conditions, including the successful closing of Pembridge’s acquisition of the Minto mine from Capstone Mining and the execution of final definitive agreements.
The financing provides low-cost capital to the company and represents a significant portion of the funding required to complete the acquisition of Minto and the company’s value-enhancing initiatives at the mine.
Further, the offtake agreement is for 100% of the copper concentrate produced at Minto delivered on a cost, insurance and freight basis to a nominated Japanese port and will remain in place until the earlier of 120 000 t of copper concentrate being delivered or December 31, 2021.
Both parties, Pembridge added on Monday, envision working together on the company's planned development of the Minto site and developing the broader region.
"Securing this agreement with such a large and sophisticated mining investor is a validation of both the great potential we see in the Minto mine and our vision of growing Pembridge using the Minto mine as a platform,” said Pembridge CEO David Linsley.
The backing from a global Japanese trading house, he added, with extensive copper market experience, is an important event for Pembridge and its shareholders as the company approaches the completion of the acquisition of Minto from Capstone.