PERTH (miningweekly.com) – The shareholders of ASX-listed junior Hot Chili have voted in favour of a deal to sell a stake in the Productora copper project, in Chile, to Chilean major Compañía Minera del Pacífico SA (CMP).
In August of last year, Hot Chili executed a joint infrastructure agreement with CMP, which would see the Chilean company take a 17.5% stake in the Productora project by contributing surface rights, easements and its 35% interest in certain Productora tenements.
In addition, CMP would be free-carried to completion of a prefeasibility study on Productora, after which the company would be responsible for funding its share of expenditure.
CMP further had the option to increase its stake in Productora to 50.1%, at a price of between $80-million and A$110-million.
Hot Chili chairperson Murray Black said on Friday that with shareholders approving the transaction, the company was now in a strong position to develop what would be a large-scale copper project.
“Importantly for Hot Chili, the infrastructure access and option to increase CMP’s stake in the project provides a mine-to-port solution and a clear funding pathway for developing Productora.”
He added that the approval of the transaction marked a major de-risking and development milestone for Hot Chili.
“Drilling is planned to get under way at the Alice copper porphyry deposit at Productora in coming weeks, and a prefeasibility is planned to be delivered in the second half of the year. We are now able to focus entirely on delivering the remaining studies and inventory growth, which will position Productora as a leading global copper project.”
Productora currently has an ore reserve of 90.5-million tonnes, grading 0.48% copper, 0.11 g/t gold and 172 parts per million (ppm) molybdenum, as well as a resource of some 214.3-million tonnes, grading 0.48% copper, 0.1 g/t gold and 138 ppm molybdenum for one-million tonnes of contained copper, 675 000 oz of gold and 29 000 t of molybdenum.
Production at Productora had been targeted for 2018, and the project was expected to have a 15- to 20-year mine life.