Australian iron-ore major Fortescue Metals has made another C$1.38-million investment in TSX-listed Candente Copper, upping its interest to 19.92%.
Through wholly owned subsidiary Nascent Exploration, Fortescue has subscribed for 27.5-million shares at C$0.05 apiece in Candente, which owns a large-scale openpit copper project, in Peru.
In addition to Fortescue’s extensive iron-ore deposits in Western Australia, the major’s recent Australian exploration activity has focused on early stage target generation for copper/gold. The company is simultaneously targeting exploration in prospective areas of South America, including Peru.
“We are very pleased to have a recognised global leader in the mining industry as a strategic investor. Considering Fortescue’s cornerstone values including safety, protection of the environment and contributing to opportunities for local communities by working together, we believe they are a great fit to support Candente Copper and the Cañariaco project,” commented CEO Joanne Freeze.
In addition to the placement, Fortescue will at its cost allocate two engineers to work on a part time joint technical committee with Candente Copper nominees, with a goal to identify the optimum strategy for the development of the Cañariaco project.
Fortescue was previously granted and retains the right to appoint one person as a director of Candente Copper, as well as certain pre-emptive rights. These rights include anti-dilution rights and a right of first refusal on any debt financing or royalty or stream agreements on any of Candente Copper’s assets.
The Cañariaco project has 7.5-billion pounds of measured and inferred resources and 1.4-billion pounds of inferred resources at a 0.3% copper cutoff. The project also has 1.97-million ounces of gold and 54-million ounces of silver.
A November 2011 prefeasibility study (PFS) forecast that the mine can produce 262-million pounds a year of copper, 39 000 oz/y of gold and 911 000 oz/t of silver, over an initial 22-year mine life.
The PFS calculated a net present value of $1.06-billion, an internal rate of return of 17.5% and a 4.4 year payback period for Cañariaco.
Candente’s stock closed at C$0.065 a share on Thursday.