Ecora Resources has inked a $50 million copper stream deal with Moxico Resources for the Mimbula mine in Zambia, enhancing its copper growth profile. The agreement allows for copper delivery over 11 years with a future entitlement reduction. The transaction is financed through a $30 million draw from its credit facility and is set for completion soon.
Ecora Resources, a company focused on critical minerals, has signed a significant $50 million copper stream agreement with Moxico Resources for the Mimbula copper mine in Zambia. This strategic deal is aimed at strengthening Ecora’s copper profile and boosting earnings both in the short and long term. The agreement covers the mine’s existing 11-year reserve-based life, with a potential for future extensions.
Under the terms, Ecora has the right to accumulate 9,150 tonnes of copper, after which its entitlement will reduce to 1% of the copper cathode produced for the remainder of the mine’s operational life. Copper delivery will be on a quarterly basis, with payments set at 30% of the average quarterly copper price from the London Metal Exchange for all copper received under the stream. This structure is designed to mitigate ramp-up risk and aims for a payback within six to seven years.
To finance this transaction, Ecora has utilized $30 million from its revolving credit facility, which has an accordion feature of $75 million, bringing the total borrowing capacity to $180 million, with approximately $55 million still available. Marc Bishop Lafleche, CEO of Ecora, expressed excitement about the new partnership with Moxico, indicating that Mimbula is a significant asset due to its quality, low operating costs, and the impressive management team overseeing its development.
The Mimbula mine, located in Zambia’s Copperbelt Province, commenced copper production in late 2022. It is recognized as a high-margin operation with low operational costs, yielding Grade A London Metal Exchange cathodes. In 2024, the mine’s production reached 14,000 tonnes of copper with operating costs positioned in the lowest global tier. An ongoing phase two expansion is anticipated to raise production capacity to approximately 56,000 tonnes annually by mid-2026.
The funds from the copper stream agreement will support the mine’s expansion and additional corporate initiatives. Completion of this transaction is expected in the near future. Additionally, Atlantic Metals, a subsidiary of Moxico Resources, entered into an agreement with Latin Metals in October 2024 to acquire a 75% interest in two copper exploration projects located in Argentina.
In summary, Ecora Resources has entered into a $50 million copper stream agreement with Moxico Resources that not only solidifies its commitment to enhancing copper production but also aims to improve earnings in the long run. With a robust operational strategy and the potential for mine expansion, the Mimbula mine presents a lucrative investment opportunity for Ecora. The financing arrangement and partnership highlight both the immediate and long-term growth prospects in the copper market.
Original Source: www.mining-technology.com
