Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF) and World Copper Ltd (TSX-V:WCU, OTCQX:WCUFF) said they have entered into a binding letter of agreement allowing Electric Royalties to acquire 0.5% gross revenue royalty on World Copper’s Zonia copper oxide project in Arizona.
Under the agreement, Electric Royalties will gain the royalty in exchange for C$1,550,000 cash and 2,000,000 shares of the company.
Electric Royalties will also have the right for a period of 15 months after the closing of the transaction to acquire a further 0.5% gross revenue royalty on the Zonia project for cash consideration of C$3,000,000.
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The agreement also grants Electric Royalties an option to acquire a 1% gross revenue royalty on the Zonia Norte deposit, adjacent to the Zonia project, for C$3,000,000 cash at any time during a period of 24 months from the date that World Copper publishes an initial report in respect of the deposit prepared in accordance with national instrument 43-101 containing an estimate of inferred mineral resources.
Electric Royalties CEO Brendan Yurik said the Zonia project was a near-term copper oxide development project in an attractive mining district with a clear path to production.
“Zonia has had an extensive amount of drilling and a significant resource estimate of over 500 million pounds of copper with potential for further resource growth,” he said. “Copper demand is projected to exceed supply by five to eight million metric tons by the end of the decade. We're very excited to partner with World Copper's management team and believe that Zonia is well-positioned to meet this demand."
READ: World Copper announces exercise of Zonia copper project royalty option and subsequent buy-out
World Copper CEO Nolan Peterson added that the company was excited to have Electric Royalties’ management team as one of its first partners in developing the Zonia project.
“Electric Royalties seeks to invest in undervalued assets with clear development potential and this led them to the Zonia Project,” Peterson said. “With significant work already carried out on Zonia, robust economics, and an achievable timeline to production, Zonia is a compelling near-term project."
Electric Royalties is a royalty company established to take advantage of the demand for a wide range of commodities that will benefit from the drive toward electrification of a variety of consumer products and other applications.
World Copper is a Vancouver-based resource company focused on the exploration and development of its copper porphyry projects: Escalones and Cristal in Chile, and Zonia in Arizona.
Contact the author Emily Jarvie at emily.jarvie@proactiveinvestors.com
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