Tertiary Minerals plc subsidiary in Zambia has signed a binding letter of agreement for First Quantum Minerals Ltd to earn in up to 90% on the Mukai copper project.
MILESTONES
Exploration licence 27066-HQ-LEL, held by Tertiary’s local partner Mwashia Resources Ltd, covers 55.4km2 and lies in the Domes region of the Zambian copper belt.
In September 2023 Tertiary delineated a large high grade copper-in-soil anomaly at the project following the 2022 technical and data sharing co-operation agreement with First Quantum.
The licence is currently under renewal and transfer to Tertiary’s subsidiary Copernicus Minerals Ltd.
The joint venture earn-in aims to identify and develop copper and / or nickel deposits as additional feed for First Quantum’s adjacent Trident project.
Trident comprises mining licences, the producing Sentinel copper mine and recently developed Enterprise nickel mine.
Tertiary said that the Sentinel processing plant could process 55 million tonnes of copper ore per year.
Over the first 24-month period, First Quantum will undertake a minimum US$1.5 million spend, including $500,000 for the first year.
An initial 51% JV interest is subject to demonstration of a mineral resource of at least 80,000 tonnes of contained copper metal within a further 24 months.
First Quantum can earn a further 29% JV interest, taking its total to 80%, on completion of a mining study and delivering a notice of intent to mine within a third 24-month period.
The company would continue sole funding Mukai until receipt of permits to construct a mining project.
Copernicus then either contributes 20% or dilutes its holding to a minimum of 10% when its interest automatically converts to a 1.5% net smelter return royalty.
On progression through all three phases of the project, First Quantum will make staged payments to Copernicus totalling up to $2m.
Tertiary executive chairman Patrick Cheetham added that the joint venture earn-in was tied to specific mineral resource and mining decision milestones rather than specific exploration expenditures.
“The bar is set high, consistent with the large size of the Sentinel mining operation and the agreed terms require First Quantum to define a copper resource with an in-ground value of over US$700 million at today’s copper price, before it earns any interest in the project.
“Evaluating the potential at Mukai is important for the parties and for Zambia given its proximity to the infrastructure already established at Trident.
“First Quantum is the natural partner for this undertaking given their unrivalled track record of recognising opportunities, defining resources, and developing projects quickly and cost effectively.”
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