Pembridge Resources PLC (LSE:PERE) said Minto Metals Corp, which was recently demerged and listed in Toronto, has made an agreement with previous owner Capstone Mining to delay part of the contingent element of purchase price, as copper production increased 46% last year to 26mln lbs.
Of the original purchase by Pembridge for up to US$20mln, Minto paid US$5mln last March and was due to pay the remaining US$15mln by the end of last month.
Instead, Minto paid US$10mln after Capstone agreed for the remaining US$5mln to be deferred until 15 January 2023.
The contingent element was dependent on production targets and copper prices, and as the copper price has been above US$3.50/lb for more than two consecutive quarters since the acquisition, the contingent consideration became due.
Chief executive and chairman Gati Al-Jebouri said the company appreciated Capstone's flexibility in agreeing to this partial deferment.
"Copper prices above $3.50/lb that have triggered the contingent purchase price payment have also resulted in higher revenues for Minto ensuring profitable operations and ability to invest in the future development of the Minto mine," he said.
Al-Jebouri also hailed the improved performance of the Minto mine in 2021 and said he looked forward to further improvements in 2022.
"The Minto operation is now on a sound path to continued increase of ore processing volumes as well as delivering on life of mine extension once exploration is completed and results delivered."
The 46% increase in Minto's production was helped by strong performances in November and December, where an average of 3,000 tonnes per day of ore was processed through the mill and 6.1mln lbs of payable copper.
Minto also released outlook guidance on production and cost for 2022, with a plan to operate the mill at an average throughput of 3,000 tonnes per day for the first half and 3,250 for the second, with the mill's ultimate permitted capacity seen at 4,200 tonnes/day.
For the full year, production is expected to be between 28.0mln lbs and 31.0mln lbs, at cash costs of US$2.70-2.90 per lb.
The capital expenditure guidance is for CA$36mln for mine development, vehicle leasing and sustaining, with exploration of CA$6-9mln.