Australian iron ore major Fortescue Metals Group (ASX: FMG) has invested C$1.38-million ($984k) in Candente Copper (TSX: DNT), increasing its stake in the Canadian junior to 19.92%.
Through wholly owned subsidiary Nascent Exploration, Fortescue has subscribed for 27.5-million at C$0.05 apiece in Candente, which owns a series of copper assets in Peru. Those include Cañariaco Norte, a large scale open-pit project, in the western side of the Peruvian Andes.
The world’s fourth-largest iron ore
producer will allocate two engineers to work on a part-time joint technical
committee with Candente’s staff, with a goal to identify the optimum strategy
for the development of Cañariaco.
Fortescue was previously granted
and retains the right to appoint one person as a director of Candente Copper,
as well as certain preemptive rights. These rights include anti-dilution
rights and a right-of-first refusal on any debt financing or royalty or stream
agreements on any of Candente Copper’s assets.
The Cañariaco project has 7.5 billion
pounds of measured and inferred resources and 1.4 billion pounds of inferred
resources at 0.3% copper cutoff. The project also has 1.97 million ounces of gold
and 54 million ounces of silver.
The mine is expected to produce 262 million pounds of copper, 39,000 ounces of gold and 911,000 ounces of silver annually, over an initial 22-year life.
Last at C$0.07 on the Toronto exchange, Candente Copper shares are up almost 7% for the day and 30% over the last 12 months. They have more than doubled so far in 2020.
Beyond iron ore
In the past two years, Fortescue has been looking to broaden its portfolio beyond iron ore. The miner has largely focused on early-stage copper-gold deposits both in Australia and South America.
Last year, it secured a farm-in and
JV agreement with Tasman Resources over the Vulcan iron
oxide-copper-gold-uranium (IOCGU) prospect, around 30 km north of BHP’s Olympic
Dam mine, in South Australia.
Fortescue entered the Argentinean
market in 2018 with the acquisition of an exploration company. It is also actively
exploring the Santa Ana concession in Ecuador since in April 2019 and has recently
completed its first 3,500m drilling program in the search for copper.