PERTH (miningweekly.com) – ASX-listed Sunstone Metals has signed a letter of intent (LoI) which could see the company divest of its Viscaria copper project, in Sweden, in exchange for a 30% shareholding in Swedish company Copperstone Resources AB.
The proposed transaction will be completed in two stages, with the initial stage comprising of some A$6-million in cash and 160-million Copperstone B-shares, worth an estimated A$25-million.
The second stage will see Sunstone receive a further A$3-million in cash and some 46-million Copperstone B shares, valued at around A$7-million, on the receipt of an environmental permit for the Viscaria project.
At the current exchange rate and the current Copperstone share price, the transaction is valued at around A$41-million, and post the transaction, Sunstone will become the largest shareholder in Copperstone, with a near 30% interest.
“Sunstone is pleased to be partnering with Copperstone with the vision of building a significant copper company in Scandinavia,” said Sunstone MD Malcolm Norris.
“We are excited about the future opportunities generated from this transaction. Sunstone will retain significant exposure to the upside presented from the Viscaria copper project, and we look forward to working with the experienced and strong Copperstone team.”
A 2016 update to the scoping study at Viscaria found that the project could produce some 200 000 t of copper over a mine life of nine years, or some 21 000 t/y of copper, based on a two-million tonne a year operation.
The updated scoping estimated a capital investment requirement of some $130-million, with pre-tax net present value at the time estimated at more than $150-million, and the internal rate of return as more than 28%.
Subject to permitting, the project is expected to start production in 2020.
Copperstone chairperson Michael Mattsson said the Viscaria project was an excellent strategic fit for the company, with Copperstone well placed to bring the project forward.
In turn, Viscaria offered Copperstone large-scale potential, with the company’s Granliden, Svartliden and Eva assets to be combined with the potential significant copper producer.