Ecora Resources has entered into a $50 million copper stream agreement with Moxico Resources for the Mimbula copper mine in Zambia. This deal strengthens Ecora’s copper strategy and involves an operational life of 11 years with potential extensions, enhancing liquidity for further expansion. Ecora’s CEO highlighted the benefits to earnings and cash flow, with a production increase projected by mid-2026.
Ecora Resources, focused on critical minerals, has finalized a $50 million copper stream agreement with Moxico Resources, aimed at production from the Mimbula copper mine in Zambia. This strategic partnership furthers Ecora’s goal to improve its copper growth trajectory and enhance earnings. The agreement encompasses the mine’s operational life, currently projected at 11 years, with potential for extension, ensuring a sustainable supply chain for copper production.
Under this agreement, Ecora will initially collect the copper until it reaches 9,150 tonnes, which is expected to occur within the next seven to eight years. After this quantity is reached, Ecora’s entitlement will reduce to 1% of the cathode copper produced for the remaining mine life. The arrangement is designed to provide copper to Ecora quarterly, with payments to Moxico set at 30% of the average quarterly copper price on the London Metal Exchange.
Ecora has also activated $30 million from its $75 million revolving credit facility to support this transaction, bringing its total borrowing capacity to $180 million, with approximately $55 million remaining available for future opportunities. CEO Marc Bishop Lafleche expressed enthusiasm for this partnership, highlighting it as a strategic move to solidify copper’s prominence in Ecora’s portfolio, which is expected to be immediately beneficial to earnings and cash flow.
The Mimbula mine, located in Zambia’s Copperbelt Province, began copper production in late 2022 and is noted for its high-margin operation and low operating costs. In 2024, the mine produced 14,000 tonnes of copper, with production costs reduced to the lowest global tier. Ongoing phase two expansion efforts are expected to raise annual copper cathode production to approximately 56,000 tonnes by mid-2026.
The proceeds from the copper stream are intended to improve liquidity for further expansion and corporate needs at Mimbula. Completion of the transaction is expected imminently, thereby positioning Ecora favorably in the evolving copper market. Furthermore, in October 2024, Moxico Resources’ subsidiary, Atlantic Metals, entered into an agreement with Latin Metals to earn a 75% stake in two copper exploration ventures in Argentina.
In summary, Ecora Resources has solidified a $50 million copper stream agreement with Moxico Resources, strategically positioning itself for growth in the copper sector. This partnership enhances the operational capabilities of the Mimbula copper mine while promising significant returns in earnings and cash flow within the coming years. The collaborative efforts are set against a backdrop of ongoing expansion and investment opportunities for both parties.
Original Source: www.mining-technology.com
