Power Metal Resources (AIM:POW) has made a strategic investment of US$1 million ($1.41 million) for 2.6% in Chile-based miner Next Minerals, which focuses on developing medium-scale copper operations.
The company will enter into a subscription agreement for the issuance of 65,142 shares and 65,142 warrants in Next Minerals to the value of US$1 million. The warrants will have a three-year life form issue and will be issued on a 1:1 ratio basis.
Next Minerals intends to use the funds to support progression of its business plan, including developing the Comahue underground copper mine, as well as to address other strategic or growth opportunities that may arise.
Power Metal says this investment gives the company exposure to the mine-ready Comahue mine located on the coastal copper belt in Antofagasta, Chile.
Comahue has a seven-year mine life for the first phase, which is expected to produce 40,000 tonnes of fine copper cathode. The life of mine revenue during phase one is anticipated to be US$495 million.
CEO Sean Wade says this investment represents a step in building further, meaningful exposure to copper within the company’s portfolio.
“Chile is the largest and most renowned copper producer globally and Chilean copper is important across the globe,” Wade says.
“This investment represents Power Metal’s strategic entry into a well-established and prestigious market, strengthening the company’s position through exposure to highly prospective assets in world-class jurisdictions.
“The Comahue mine offers Power Metal shareholders access to a project that can advance to production on an accelerated timescale with all key permits and approvals granted, as well as a large exploration footprint, and in a time where we are seeing an attractive copper market.”
Comahue has a resource estimate of 9.91 million tonnes @ 0.81% copper, with 70% of the total resources recorded within the measured and indicated category.
Detailed engineering has been completed and all necessary permits, including environmental approvals granted. Based on current reserves plus expected additions from its other mining properties, Next Minerals could extend project life beyond 15 years and recover 100,000 tonnes of fine copper cathode, with a metallurgical recovery of 87% to 90%.
Write to Aaliyah Rogan at Mining.com.au
Images: Power Metal Resources
