Ecora Resources has entered a $50 million copper stream agreement with Moxico Resources for the Mimbula copper mine in Zambia. This deal aims to enhance Ecora’s copper growth and earnings. The stream agreement covers an 11-year lifespan with a potential reduction in entitlement after 9,150 tonnes. Proceeds will support Mimbula’s expansion and corporate needs.
Ecora Resources, a company focusing on critical minerals, has finalized a $50 million copper stream agreement with Moxico Resources for the Mimbula copper mine located in Zambia. This agreement is part of Ecora’s strategic initiative to elevate its copper growth profile while enhancing short- and long-term earnings.
The copper stream will encompass the Mimbula mine’s established reserve-based lifespan of 11 years, with potential for future extensions. After Ecora has procured a total of 9,150 tonnes of copper, expected to occur in seven to eight years, its share of entitlement to the stream will reduce to 1% for the mine’s operational lifespan.
Ecora will receive copper in quarterly increments, committing to pay Moxico 30% of the quarterly average copper price on the London Metal Exchange for all copper delivered through the stream. This agreement is structured to mitigate ramp-up risks, with expected payback within six to seven years.
To finance this transaction, Ecora has accessed $30 million from a $75 million accordion feature within its revolving credit facility, increasing the total committed borrowing capacity to $180 million, with around $55 million remaining accessible.
Marc Bishop Lafleche, Ecora’s Chief Executive Officer, expressed enthusiasm about this new partnership, stating it reinforces copper’s significance to their commodity exposure while being immediately beneficial to earnings and free cash flow. He emphasized Mimbula’s qualities, including its high-quality ore body and low operating costs, along with an exceptional management team.
Mimbula, situated in the Zambian Copperbelt Province, commenced copper production in late 2022, yielding high-margin products with competitive operating costs. In 2024, the mine produced 14,000 tonnes of copper at among the lowest operating costs globally.
Currently, a phase two expansion is underway, aiming to elevate copper cathode production to approximately 56,000 tonnes annually by mid-2026. The revenues from the streaming deal will bolster Mimbula’s expansion initiatives and support other corporate objectives. The completion of this transaction is expected in the near future.
In conclusion, Ecora Resources has strategically secured a $50 million copper stream agreement with Moxico Resources for the Mimbula mine, enhancing its copper profile and supporting its financial objectives. The structure of the stream agreement mitigates risks while promising swift payback. With a focus on quality ore and cost efficiency, Mimbula presents a significant operational advantage, further solidifying Ecora’s market position in the copper sector.
Original Source: www.mining-technology.com
