Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF) and World Copper Ltd (TSX-V:WCU, OTCQX:WCUFF) announced that they have entered into a binding letter of agreement allowing Electric Royalties to acquire a royalty of 0 .5% on gross revenues World Copper’s Zonia copper oxide project in Arizona.
Under the agreement, Electric Royalties will obtain the royalty in exchange for C$1,550,000 in cash and 2,000,000 shares of the company.
Electric Royalties will also have the right, for a period of 15 months after the closing of the transaction, to acquire an additional royalty of 0.5% on the gross revenues of the Zonia project for a cash consideration of C$3,000,000.
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The agreement also grants Electric Royalties an option to acquire a 1% gross revenue royalty from the Zonia Norte field, adjacent to the Zonia Project, for C$3,000,000 in cash at any time during a period of 24 months from the date World Copper issues a first deposit report prepared in accordance with National Instrument 43-101 containing an estimate of inferred mineral resources.
Electric Royalties CEO Brendan Yurik said the Zonia project is a near-term copper oxide development project in an attractive mining district with a clear path to production.
“Zonia has had a significant amount of drilling and a significant resource estimate of over 500 million pounds of copper with potential for further resource growth,” he said. “Copper demand is expected to exceed supply by five to eight million metric tons by the end of the decade. We are delighted to partner with the management team of World Copper and believe that Zonia is well placed to meet this demand. »
READ: World Copper announces exercise of Zonia copper project royalty option and subsequent buyout
World Copper CEO Nolan Peterson added that the company was delighted to have the Electric Royalties management team as one of its first partners in the development of the Zonia project.
“Electric Royalties is looking to invest in undervalued assets with clear development potential and that led them to the Zonia project,” Peterson said. “With significant work already done on Zonia, strong economics and an achievable production schedule, Zonia is a compelling near-term project.”
Electric Royalties is a royalty company created to capitalize on demand for a wide range of products that will benefit from the drive towards electrification in a variety of consumer products and other applications.
World Copper is a Vancouver-based resource company focused on the exploration and development of its copper porphyry projects: Escalones and Cristal in Chile, and Zonia in Arizona.
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