PERTH (miningweekly.com) – Copper developer Avanco Resources has secured a $12-million investment from shareholder BlackRock World Mining Trust, to assist in financing its Antas North project, in Brazil.
The BlackRock investment would see Avanco secure the shortfall funding required to develop the $70-million Antas North project. In June, it secured a $58-million senior debt facility.
Under the terms of the agreement, BlackRock would provide the funding in return for net smelter return royalty payments of 2% on the copper production and 25% on the gold production, as well as 2% on any other metals produced during Stage 1 operations and the Pedra Branca licence areas.
The transaction was conditional upon the completion of a number of Stage 1 activities, including the publication of a Joint Ore Reserves Committee-compliant reserve statement, and the receipt of a mining licence for the Stage 1 operation.
The Stage 1 copper project was expected to deliver some 12 000 t/y of copper and some 7 000 oz/y of gold. The Stage 1 development would have a life-of-mine of some nine years, and would have a net present value of $224-million and an internal rate of return of 94%.
Avanco was pursuing a staged development of Antas North, which formed part of the larger Pedra Branca project. Stage 2 development could see the production move to between 40 000 t/y and 50 000 t/y of copper metal.
If new project discoveries were made outside the Stage 1 and 2 areas, and were priorities over the Pedra Branca holdings, the two companies would also work to agree that the royalty would apply to the new project.