Freeport Resources (TSXV: FRI) has repurchased a 1.5% net smelter returns royalty on its Yandera copper project in Papua New Guinea, leaving the company with 100% ownership of the asset and no remaining royalty obligations.
The royalty was created as part of Freeport’s 2020 acquisition of the project. The company did not disclose what it paid to retire the royalty or who held it.
The buyback is part of a strategic review aimed at maximizing the value of Yandera, which Freeport says is significantly undervalued given historical spending on the project, current copper prices and the potential to expand the resource. Removing the royalty, the company said, strengthens its position in ongoing talks with several potential joint venture partners, strategic partners and acquirers.
Nathan Chutas, director and senior vice president of operations, said there is “strong interest in Yandera from potential strategic partners.” He tied that interest to record copper prices and to continued output cuts at Chinese smelters, which are short of copper concentrate. Chutas added that the company wants a partner to help carry the project through a definitive feasibility study, a final investment decision and mine construction.
More than US$200 million has been spent on Yandera since 2005, funding roughly 154,600 metres of drilling, most of it at the Yandera Central deposit. A 2017 prefeasibility study prepared by Worley Parsons outlined a historical measured and indicated resource of 728 million tonnes grading 0.39% copper equivalent.
The feasibility work depends on renewal of exploration licence EL 1335, which covers the 245.5 square kilometre tenement around the project.
The mandatory warden’s hearing for that renewal took place at Yandera on March 25. Landowners, clans and the local member of Parliament turned out in support. The warden’s report then goes to the country’s Mining Advisory Council, which makes a recommendation to the Mining Minister. The results of that hearing are still pending.
Freeport Resources last traded at $0.055 on the TSX Venture.
