Adventus Mining Corporation (TSXV: ADZN) and Salazar Resources Limited (TSXV: SRL) announced on Monday two agreements entered that effectively secured a total of US$235.5 million. The funds are expected to be used in advancing the partnership’s Curipamba project.
The two companies’ joint venture entered into a precious metals purchase agreement with Wheaton Precious Metals for US$180.5 million. In addition, Adventus Mining also entered into an offtake financing agreement with Trafigura Pte for US$55 million.
The total secured financial commitment compares to US$248 million in estimated capital cost for the property based on its recent feasibility study released in October 2021.
As part of the arrangement with Wheaton, US$175.5 million is expected for the initial upfront cash consideration, with US$13 million of which is for an early deposit for pre-construction activities and US$0.5 million for local community development initiatives. The remainder will be available in four installments during the construction.
In exchange, Wheaton will purchase 50% of the gold stream until 150,000 ounces then 33% until the life of mine, and 75% of the silver stream until 4.6 million ounces then 50% until the life of mine.
On the other hand, the arrangement with Trafigura will see an initial US$45 million commitment from the financing facility, US$5 million of which is for an early deposit for pre-construction activities. The remainder is set for two installments during the construction.
The Trafigura facility carries an 8% interest and a 5-year term. Upon closing, 13.5 million purchase warrants of Adventus Mining common shares will be issued to Trafigura based on volume-weighted average price by then.
The Curipamba project is located in central Ecuador and contains the El Domo deposit. In its last feasibility study, the property estimates US$259 million after-tax NPV8% and 32% IRR for initial open-pit development.
Adventus Mining Corporation last traded at $1.02 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.