Ecora Resources PLC (LSE:ECOR, TSX:ECOR, OTCQX:ECRAF) is to acquire a 0.25% net smelter return royalty over all metal production from the open pit of the Vizcachitas copper project in Chile.
Los Andes Copper has sold the royalty for a total cash consideration of US$20mln.
Ecora noted that it was a rare opportunity to acquire a royalty over one of the world's largest undeveloped copper projects located in a well-established mining jurisdiction.
Vizcachitas lies 120 kilometres north of Santiago, within Chile's prolific copper belt alongside the large scale, producing Los Pelambres (Antofagasta), Los Bronces (Anglo American), Rio Blanco-Andina (Codelco) and El Teniente (Codelco) mines.
The mine has a 26-year estimated reserve life and complements the group's existing portfolio of copper royalties at West Musgrave and Santo Domingo and Mantos Blancos, Ecora said.
Vizcachitas' first production is scheduled for 2029, with the royalty rate stepping up in the event commercial production does not occur prior to 30 June 2030
Average annual copper production of 183,000 tonnes (t) is predicted for the first eight years and an average of 153,000t over the whole life of the mine
Ecora said it will fund the deal through a combination of cash at hand and existing credit lines.
Marc Bishop Lafleche, Ecora’s chief executive, commented: “This transaction further complements our copper royalty exposure which is underpinned by a development pipeline poised to deliver continued growth until the middle of the next decade.
"Vizcachitas fits our core investment criteria as a large-scale, low-cost, and long-life project in an established mining region.
“Furthermore, we retain the financial flexibility to add further transactions that can similarly enhance our leading portfolio of future-facing commodities royalties."