Nasdaq- and TSX-listed Elemental Royalty has entered into an investment agreement of $25-million with Peruvian mining company Quilla Resources and its subsidiary Minera Pamapa de Cobre (MPC) to expand its royalty exposure to the Chapi copper project in Peru and support Quilla’s next phase of growth.

For Elemental, this transaction includes the acquisition of equity for Quilla and an additional perpetual, uncapped 1% net smelter return (NSR) royalty over the Pampa Negra and Candelaria concessions, increasing the company’s royalty interest to a total of 3% NSR.

Elemental highlights that Pampa Negra and Candeleria will be important contributors to Quilla’s expansion of Chapi from 10 000 t/y to 30 000 t/y of copper cathode production.

Moreover, as part of the same transaction package, Elemental has subscribed for shares representing about 9% of Quilla, providing the company with additional alignment and upside.

Elemental says that it funded this transaction from cash on hand and proceeds from the transaction will be used by Quilla to fast-track exploration, as well as permitting and engineering work related to the planned expansion.

“This transaction moves Chapi into a top ten royalty for Elemental by increasing our exposure to Quilla’s Phase 2 expansion at Pampa Negra and Candeleria following the recent successful commissioning of the Chapi mine.

“The management team’s proven track record of operating in Peru sets them up for continued growth, while Chapi is strategically located within the Southern Copper Belt alongside mines operated by [mining companies] Freeport-McMoRan, Buenaventura, Anglo American and Southern Copper.

“We are very pleased to enhance our royalty on the project and simultaneously become a Quilla shareholder as they move toward listing on a public Exchange,” says Elemental CEO David M Cole.

The Chapi mine is comprised of two principal openpits, underground workings, a crushing and agglomeration circuit, heap leach pads, a solvent extraction plant, an electrowinning copper cathode plant, and related infrastructure including mine camp, office facilities, water supply, and power.