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Metminco firms up terms for Los Calatos farm-out

Published: 07:39 04 Aug 2016 BST

picture of copper wires
Los Calatos is a potentially world class copper deposit

South American copper and gold explorer Metminco Limited (LON:MNC ASX:MNC) has firmed up terms of the farm-out for the Los Calatos project in Peru with investment fund CD Capital.

As flagged earlier, one of the CD funds, CD Capital Fund III, will invest up to US$45mln for a 70% stake and fund a definitive feasibility study at the prospect.

Metminco will retain a 30% indirect interest in the project.

Final sign off is expected in late August or early September with work to commence soon after on a Pre-Feasibility Study (PFS). 

Metminco will also move its stake in the project into a new a Canadian private company, Los Calatos Holding Ltd (LCH).

CD Capital Fund III’s investment will be in three tranches:  an US$16mln for a 51% interest in LCH and two subsequent investments of US$14.5mln to take that up to 65% and 70% respectively.

Currently on care and maintenance, once settlement occurs work will start to upgrade the existing mineral resources to Measured and Indicated status, expand the resource with exploration drilling,  complete the PFS, and work on permits.

Carmel Daniele,  CD Capital's founder and chief investment officer  said  Los Calatos Project was a world class mining development opportunity.  

“We will work with the Metminco team to upgrade and increase the size of the already large copper resource and develop the project quickly to a construction decision. 

 William Howe, managing director, added: “ Both parties are committed and focused on advancing the Los Calatos Project forward to a construction decision as soon as possible. 

“With funding secured and work streams defined for the Los Calatos project, the company is now focused on progressing its Quinchia Gold Portfolio in Colombia.”

 

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