TORONTO, Jan. 17, 2022 /CNW/ - Adventus Mining
Corporation ("Adventus Mining") (TSXV: ADZN) (OTCQX:
ADVZF) and Salazar Resources Limited
("Salazar") (TSXV: SRL) (OTCQX: SRLZF) (collectively the
"Participants") are pleased to announce that Alliance Metals
International ("AMI"), a wholly-owned subsidiary of the
Participants' joint venture company Salazar Holdings Ltd., has,
together with Adventus Mining, entered into a definitive Precious
Metals Purchase Agreement (the "PMPA") with Wheaton Precious Metals
International Ltd., a wholly-owned subsidiary of Wheaton Precious
Metals Corp. ( "Wheaton") in respect of the Curipamba copper
project in central Ecuador (the
"Curipamba Project"). Additionally, Adventus Mining has entered
into a binding engagement for an Offtake Financing Agreement (the
"OFA") with Trafigura Pte Ltd ("Trafigura") in respect of the
Curipamba Project. A detailed feasibility study on the Curipamba
Project, which focuses on the development of the shallow and
high-grade El Domo deposit, was completed in late 2021 (the
"Feasibility Study"). This significant financial commitment
validates the Feasibility Study and economic potential of the
Curipamba Project for all stakeholders and allows Adventus Mining
and Salazar to firmly advance towards potential production.
Highlights
- Adventus Mining and Salazar have secured a total of
US$235.5 million to advance and,
following a construction decision, build the Curipamba Project,
US$23.5 million of which will be
available for pre-construction activities
-
- Financial arrangement compares to an estimated capital cost of
US$248 million outlined in the
Feasibility Study
- US$180.5 million financial
commitment from Wheaton
-
- US$175.5 million upfront cash
consideration, with US$13 million
early deposit for pre-construction activities, and US$500,000 for local community development
initiatives as part of the Curipamba Project prior to
production
- Remainder to be available in four (4) staged installments
during future construction, subject to certain customary conditions
precedent being satisfied
- PMPA provides certain gold and silver streaming rights to
Wheaton over life-of-mine, but limited to volcanic massive sulphide
deposits that can be milled within the proposed Feasibility Study
process plant
- Wheaton also intends to provide up to US$5M in equity to Adventus Mining, subject to a
maximum Wheaton ownership level below 10%
- US$55 million financial
commitment from Trafigura
-
- US$45 million senior debt
facility, including US$5 million
early deposit for pre-construction activities (the "Facility")
- Remainder to be available in two (2) staged installments during
future construction, subject to certain customary condition
precedents being satisfied
- OFA includes an offtake agreement that provides certain
concentrate offtake rights to Trafigura for future production from
the El Domo deposit over the life-of-mine, based on the offtake
terms utilized in the Feasibility Study
- Trafigura intends to provide US$10
million in equity to Adventus Mining, subject to certain
conditions precedent being satisfied
President & CEO of Adventus Mining Christian Kargl-Simard
stated:
"This financial commitment is a major milestone for the
Adventus Mining and Salazar and secures our ability to further
optimize and begin construction of the Curipamba Project.
Furthermore, the competitive structures of the financial
arrangements serve to protect and benefit the interests of our
investors and commercial partners. Based on the projected revenues
payable to Wheaton, the potential read-through value of Curipamba
is significantly higher than US$1
billion. We want to thank both the Wheaton and Trafigura
teams who worked closely with us in conjunction with the
completions of the Curipamba feasibility study and ESIA report in
2021. Special appreciation to the Wheaton team who have
consistently showed their confidence and support for Adventus
Mining since their equity investment in 2018.
To our partners and many stakeholders in Ecuador, Adventus Mining and Salazar are
pleased to secure these significant long-term commitments from two
of the largest and most respected metals and mining groups
globally, which highlight both the confidence in the Curipamba
Project becoming one of the next modern copper mines and in the
growing responsible mining sector of Ecuador."
Streaming Arrangement with Wheaton – US$180.5 million
Pursuant to the PMPA, Wheaton will pay AMI a total upfront cash
consideration of US$175.5 million,
US$13 million of which can be paid on
an early deposit basis to be used for pre-construction activities
at the Curipamba Project and US$500,000 of which will be used to support
certain local development initiatives in the Curipamba Project
communities in the environmental, social and governance (ESG)
areas. The remainder of the upfront cash consideration is payable
in four staged installments during future construction of the
Curipamba Project, subject to certain customary conditions
precedent being satisfied.
Additional PMPA Transaction Details
- Under the PMPA, Wheaton will purchase 50% of the payable gold
production until 150 thousand ounces have been delivered,
thereafter dropping to 33% of payable gold production for the life
of mine; and 75% of the payable silver production until 4.6 million
ounces have been delivered, thereafter dropping to 50% for the life
of mine
- Wheaton will make ongoing payments for the gold and silver
ounces delivered equal to 18% of the spot prices ("Production
Payment") until the value of gold and silver delivered less the
Production Payment is equal to the upfront consideration of
US$175.5 million, at which point the
Production Payment will increase to 22% of the spot prices
- Prior to the official start of construction, AMI has a one-time
option to repurchase 33% of the stream (gold and silver) on a
change of control event for Adventus Mining, for an amount ensuring
a fixed internal rate of return to Wheaton
- As is customary for Wheaton streaming arrangements, additional
ESG support will be available from Wheaton while Curipamba is in
production
- Adventus Mining and certain subsidiaries, which are the
majority owners of the Curipamba Project, will provide Wheaton with
corporate guarantees, pledges, and other security over their
assets
- PMPA transaction is fully committed, with initial early deposit
drawdown available at Adventus Mining's discretion subject to
certain customary conditions precedent being satisfied
Offtake Financing Arrangement with Trafigura – US$55 million
Pursuant to the OFA, Trafigura will provide Adventus Mining with
a Facility of US$45 million,
US$5 million of which can be paid on
an early deposit basis to be used for pre-construction activities
at the Curipamba Project. The remainder of the cash consideration
is payable in two (2) staged installments during future
construction of the Curipamba Project, subject to certain customary
conditions precedent being satisfied.
Additional OFA Transaction Details
- Facility has a 5-year term, with an 8% interest margin, subject
to a 0.5% SOFR floor
- OFA includes an offtake agreement that provides certain
concentrate offtake rights to Trafigura for future production from
the El Domo deposit over the life of mine, based on the terms in
the Feasibility Study
- OFA transaction is binding subject to completion of definitive
documentation and an inter-creditor agreement with Wheaton, which
are expected to be completed in Q2 2022
- Upon closing of the OFA, 13.5 million common share purchase
warrants of Adventus Mining will be issued to Trafigura, priced on
the basis of a 25% premium to the 10-day VWAP at the closing date
("Lender's Warrants"), subject to approval of the TSX Venture
Exchange. The Lender's Warrants will have a 3-year term, with 5.5
million of them subject to accelerator provisions based on Adventus
Mining's share price
- Trafigura intends to provide US$10
million in equity to Adventus Mining, subject to certain
customary conditions precedent being satisfied
For Adventus Mining, Bennett
Jones is acting as legal advisor for the PMPA and DLA Piper
(Canada) is acting as legal
advisor for the OFA.
Curipamba Project
The Curipamba Project is located in central Ecuador approximately 150 km northeast of the
major port city of Guayaquil and comprises of seven mineral
concessions representing approximately 21,500 hectares (215
km2) in a setting of low-lying hills and plains between
300 to 900 metres above sea level. Curipamba contains the
high-grade copper-gold dominant El Domo VMS deposit.
The Feasibility Study included the first estimate of mineral
reserves (open pit) and updated the total estimate of mineral
resources (open pit and underground). Please refer to Adventus
Mining's October 26, 2021 news
release for the summary of Feasibility Study results –
link. The complete Feasibility Study NI 43-101
Technical Report is available on SEDAR – dated December 10, 2021. Also in 2021, Adventus Mining
and Salazar completed and submitted a detailed Environmental and
Social Impact Assessment ("ESIA") report as part of the formal
stakeholder consultation and environmental licensing process with
the Government of Ecuador for
future construction and operation of the Curipamba Project. Please
refer to Adventus Mining's November 18,
2021 news release for additional details –
link.
Adventus Mining is 75%-owner of the Curipamba Project and leads
its continuing development in the detailed engineering and early
site works phase. Adventus Mining will fund capital costs to
production and will receive 95% of future free cashflows until its
investments since 2017 are repaid, after which the project
cashflows will be shared 75% to Adventus Mining and 25% to its
partner Salazar Resources Ltd. over the life of mine.
Qualified Person
The scientific and technical content
of this news release was reviewed, verified, and approved by Mr.
Dustin Small, P.Eng., Vice President
of Projects for Adventus Mining, and a Qualified Person as defined
by Canadian Securities Administrators National Instrument 43-101 -
Standards of Disclosure for Mineral Projects.
About Adventus Mining
Adventus Mining Corporation is
an Ecuador-focused copper-gold
exploration and development company. Adventus Mining is 75%-owner
of the 215 km2 Curipamba copper project, which has a
completed feasibility study on the shallow and high-grade El Domo
deposit. In addition, Adventus Mining is engaged in a country-wide
exploration alliance with its partner in Ecuador, which has incorporated the Pijili and
Santiago copper-gold porphyry
projects to date. Outside of Ecuador, Adventus Mining owns an exploration
project portfolio in Ireland with
South32 Limited as funding partner. Its strategic shareholders
include Altius Minerals Corporation, Greenstone Resources LP,
Wheaton Precious Metals Corp., and the Nobis Group of Ecuador. Adventus Mining is based in
Toronto, Canada, and is listed on
the TSX Venture Exchange under the symbol ADZN and trades on the
OTCQX under the symbol ADVZF.
About Salazar
Salazar Resources Limited is focused on
creating value and positive change through discovery, exploration,
and development in Ecuador. The
team has an unrivalled understanding of the geology in-country and
has played an integral role in the discovery of many of the major
projects in Ecuador, including the
two newest operating gold and copper mines. Salazar Resources has a
wholly owned pipeline of copper-gold exploration projects across
Ecuador with a strategy to make
another commercial discovery and farm-out non-core assets. The
Company actively engages with Ecuadorian communities and together
with the Salazar family it co-founded The Salazar Foundation, an
independent non-profit organization dedicated to sustainable
progress through economic development. The Company already has
carried interests in three projects. At its maiden discovery,
Curipamba, Salazar Resources has a 25% stake fully carried through
to production. At two copper-gold porphyry projects, Pijili and
Santiago, the Company has a 20%
stake fully carried through to a construction decision.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
This press release contains "forward -looking information"
within the meaning of applicable Canadian securities laws.
Forward-looking statements are based on the beliefs, expectations,
and opinions of the management of the Participants as of the date
the statement is published, and the Participants assume no
obligation to update any forward-looking statement, except as
required by law. In certain cases, forward–looking statements can
be identified by the use of words such as "plans", "expects",
"outlook", "guidance", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "believes", or variations
of such words and phrases or statements that certain actions,
events or results "may", "could", "would", "might", "will be
taken", "occur" or "be achieved" or the negative of these terms or
comparable terminology.
Forward-looking information herein includes, but is not limited
to, statements that address activities, events, or developments
that Participants expect or anticipate will or may occur in the
future, including statements regarding the Participants having
secured sufficient funds to advance and construct the Curipamba
Project, projections regarding future production at the Curipamba
Project, satisfaction of conditions precedent, including the
completion and execution of definitive documentation with respect
to the OFA transaction, and completion and funding under the PMPA
and the OFA transaction. Although the Participants have attempted
to identify important factors that could cause actual actions,
events, or results to differ materially from those described in
forward-looking information, there may be other factors that cause
actions, events or results not to be as anticipated, estimated, or
intended, including risks associated with the ability of Alliance
Metals International and/or Adventus Mining to satisfy the
conditions precedent to receive funding under the PMPA and the OFA
transaction; the volatility of metal prices; risks and dangers
inherent in exploration, development and mining activities; risks
of not achieving construction and development timelines and
estimates; uncertainty of mineral reserve and mineral resource
estimates; the ability to obtain and maintain any necessary
permits, consents or authorizations required for mining activities;
risks related to environmental regulations or hazards and
compliance with complex regulations associated with mining
activities; risks related to the availability of adequate
infrastructure, fluctuations in price and availability of energy
and other inputs necessary for construction development and
ultimately mining operations; shortages or cost increases in
necessary equipment, supplies and labour; regulatory risks; climate
change risks; volatility of global financial conditions; risks
related to reliance upon contractors and third parties; challenges
to title or surface rights; dependence on key personnel; risks
associated with conflicts of interest among the Company's directors
and officers; the risk of an uninsurable or uninsured loss;
litigation risk; taxation, including changes in tax laws and
interpretation of tax laws; community support for operations
including risks related to strikes and the halting of such
operations, from time to time; as well as other factors identified
and as described in more detail under the heading "Risk Factors" in
Adventus Mining's most recent Annual Information Form and the
Participants' other filings with Canadian securities regulators,
which may be viewed at www.sedar.com. The list is not exhaustive of
the factors that may affect the Participants' forward-looking
statements. There can be no assurance that such statements will
prove to be accurate, and actual results, performance or
achievements could differ materially from those expressed in, or
implied by, these forward-looking statements. Accordingly, no
assurance can be given that any events anticipated by the
forward-looking statements will transpire or occur, or if any of
them do, what benefits or liabilities the Participants will derive
therefrom. The Participants' forward-looking statements reflect
current expectations regarding future events and operating
performance and speak only as of the date hereof and except as
required by applicable securities laws, the Participants do not
assume any obligation to update forward-looking statements if
circumstances or management's beliefs, expectations or opinions
should change other than as required by applicable law. For the
reasons set forth above, undue reliance should not be placed on
forward-looking statements.
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SOURCE Adventus Mining Corporation