Photo by: Reuters
PERTH (miningweekly.com) – Copper developer Avanco Resources has executed a $12-million nondilutive production royalty investment with BlackRock World Mining Trust, over the Antas mine in Brazil.
Avanco told shareholders on Monday that a due diligence had been completed, and financing and tax structures agreed upon under which BlackRock would provide $12-million in return for net smelter royalty payments comprising 2% on copper, 25% on gold and 2% on all other metals produced from Stage 1 of the Antas project, and the Stage 2 Pedra Branca licensed area.
Avanco was currently fast-tracking the Stage 1 development of Antas, which would see the smaller Antas North project deliver about 12 000 t/y of copper and 7 000 oz/y of gold.
Initial production from Stage 1 has been targeted for early 2015.
The Stage 2 Pedra Branca project was currently estimated to host 46.8-million tonnes of ore for about 560 000 t of copper, 500 000 oz of gold and more than one-million ounces of silver. Stage 2 development could see the production move to between 40 000 t/y and 50 000 t/y of copper metal.
Other discoveries within Avanco’s current licence portfolio, in addition to Stage 1 and 2, would also carry a flat rate 2% net smelter production royalty under the BlackRock agreement.
Avanco said that draw-down of the funds was conditional on certain issues, including the publication of Joint Ore Reserves Committee-compliant reported reserves, and the receipt of the mining licence for Stage 1.
With the $12-million royalty secured, Avanco could now focus on progressing the $58-million debt component of the project development. Lead banker Banco Votoratim had already committed $30-million of this funding and had been engaged to syndicate the remaining $28-million.