Ecora Resources has signed a $50 million streaming deal for the Mimbula copper mine in Zambia, enhancing its exposure to copper and increasing earnings potential. The mine is undergoing a significant expansion to boost production capacity and includes prospects for future cobalt extraction. Ecora plans to finance the deal through cash reserves and debt, aiming for long-term benefits and debt reduction.
Ecora Resources, a critical minerals royalty company, has recently announced a significant $50 million streaming deal for the Mimbula copper mine in Zambia, owned by Moxico Resources. This all-cash agreement encompasses the entire 11-year lifespan of the mine based on its current reserves, with possibilities for extension. Marc Bishop Lafleche, CEO of Ecora, emphasizes that this acquisition will solidify copper as a central element of their commodity portfolio, contributing positively to their earnings and free cash flow.
The Mimbula project, located in Zambia’s Copperbelt Province, commenced production in late 2022 and is currently in Phase 1 of operations. It employs a heap leach and solvent extraction/electrowinning (SX/EW) method to produce high-quality copper cathodes at 99.999% purity, with an initial capacity of 10,000 tonnes per annum (tpa). A Phase 2 brownfield expansion is underway to enhance production capacity to 56,000 tpa.
According to Lafleche, the Mimbula project represents an ideal investment, boasting a high-quality ore body and low operating costs, supported by a seasoned management team that has effectively advanced the project. Phase 2’s first section was successfully completed and commissioned in early 2024, increasing cathode capacity to 20,000 tpa, with a total production of 14,000 tonnes last year, operating within the most efficient cost bracket globally.
Moxico Resources, which owns 93% of the project, anticipates completing the final stages of the expansion by early next year, achieving full capacity by mid-2026. Additionally, there are considerations for a Phase 3, which would involve constructing a processing plant to extract cobalt, given the current resource indicates 38.6 million tonnes at a grade of 0.037% cobalt.
Lafleche further noted that integrating the Mimbula copper stream will strengthen Ecora’s copper growth strategy across varying timeframes. Post-transaction, copper and base metal exposures will represent approximately 45% and 75% of the net asset value, respectively. Ecora’s portfolio also includes copper assets such as the Mantos Blancos mine in Chile and the Carlota mine in Arizona.
To finance this acquisition, Ecora will utilize a mix of available cash and debt, including $30 million from its revolving credit facility. Lafleche emphasized that this transaction is designed to align the copper entitlement stream at the start of the investment, thereby enhancing earnings and contributing to expected debt reduction over the next 12 to 24 months.
In conclusion, Ecora Resources has strategically positioned itself in the copper market through a $50 million streaming agreement with Moxico Resources for the Mimbula copper mine. This acquisition not only strengthens Ecora’s portfolio in critical minerals but also enhances its earnings potential and copper production capacity. The project presents a promising investment, supported by low operating costs and a solid growth strategy moving forward.
Original Source: www.mining.com
