PROJECT FINANCE

Candente Copper shares jump on Fortescue investment

"We believe they are a great fit to support the Cañariaco project," says Candente CEO

 Fortescue has increased its strategic holding in Candente Copper, giving it increased exposure to the feasibility-stage Cañariaco project in Peru

Fortescue has increased its strategic holding in Candente Copper, giving it increased exposure to the feasibility-stage Cañariaco project in Peru

Fortescue has agreed to make a C$1.38 million (US$986,000) investment to increase its Candente stake to 19.92% via subsidiary Nascent Exploration, which has subscribed to a placement of 27.5 million shares at 5c.

FMG, known for iron ore production in Australia, has been increasing its exposure to early stage copper-gold exploration in Latin America.

Candente CEO Joanne Freeze welcomed FMG's investment.

"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 Canariaco project," she said.

As part of the placement agreement, FMG will allocate two engineers at its own cost to work with Candente nominees on Canariaco's development strategy.

Fortescue was previously granted and retains the right to appoint one director to the Candente board and holds certain pre-emptive anti-dilution rights and a right of first refusal on any debt financing, royalty or stream opportunities on any of Candente's assets.

Candente's fully-owned Canariaco project includes the advanced Canariaco Norte deposit, Canariaco Sur and Quebrada Verde. A 2011 prefeasibility study on Canariaco Norte calculated annual output of 262Mlb copper, 39,000oz gold and 911,000oz silver, over an initial 22-year mine life, with a US$1.06 billion NPV (at 8% discount rate) on a proposed $1.6 billion project providing an IRR of 17.5% and a 4.4-year initial capital payback.

The PFS was underpinned by combined measured and indicated resources of 7.5 billion pounds copper grading 0.45% and 1.4Blb inferred grading 0.41% at a 0.3% cut-off. The project is also estimated to host 1.97Moz gold and 45Moz silver.

Definitive feasibility-stage work was halted in 2013 when about 50% complete.

In the three months to March 31, 2020, Candente restarted work on the project, undertaking an engineering review of resource work and mine plan studies completed to date to identify the potential for a higher-grade starter operation. It has also undertaken field activities such as geological mapping and sampling at Quebrada Verde, third party reviews, field visits for permit applications, and reclamation on drill sites and camp roads.

Candente shares (TSX:DNT) closed up 7.7% at 7c Friday, capitalising the company at C$15 million (US$10.7 million).

 

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Journal Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Journal Intelligence team.

editions

ESG Mining Company Index: Benchmarking the Future of Sustainable Mining

The ESG Mining Company Index report provides an in-depth evaluation of ESG performance of 61 of the world's largest mining companies. Using a robust framework, it assesses each company across 9 meticulously weighted indicators within 6 essential pillars.

editions

Mining Journal Intelligence Global Leadership Report 2024: Net Zero

Gain insights into decarbonisation trends and strategies from interviews with 20+ top mining executives and experts plus an industrywide survey.

editions

Mining Journal Intelligence Project Pipeline Handbook 2024

View our 50 top mining projects, handpicked using a unique, objective selection process from a database of 450+ global assets.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.