Ecora Resources has signed a $50 million streaming deal for the Mimbula copper mine in Zambia, enhancing its copper-focused asset portfolio. The mine began production in late 2022 and is currently expanding. The deal is financed through cash and debt, aiming for increased earnings and debt reduction in the coming years.
Ecora Resources has entered a $50 million all-cash streaming agreement concerning Moxico Resources’ Mimbula copper mine in Zambia. This agreement solidifies Ecora’s focus on copper, enhancing its earnings and free cash flow. Ecora holds a diverse portfolio of over 20 royalty and streaming assets, emphasizing critical minerals like copper, cobalt, and nickel.
The Mimbula project, which lies in Zambia’s Copperbelt Province near Chingola, commenced production in late 2022. It currently operates under Phase 1 with a production capacity of 10,000 tonnes per annum (tpa) using a heap leach and solvent extraction/electrowinning (SX/EW) process. Plans for Phase 2 aim to elevate production to 56,000 tpa, with a doubling of capacity already achieved for early 2024.
The CEO of Ecora, Marc Bishop Lafleche, highlighted Mimbula’s investment appeal due to its high-quality ore, low operating costs, and experienced management team. Moxico’s ownership stands at 93%, and future phases may include a processing plant for cobalt extraction, as Mimbula possesses a resource grading 0.037% cobalt.
Ecora anticipates significant copper portfolio growth, projecting that its exposure will rise to approximately 45% of its net asset value, with 80% of royalties in its portfolio coming from mines in the lower cost curve. Assets include Mantos Blancos in Chile and Carlota in Arizona.
To finance this acquisition, Ecora will utilize cash reserves and debt, tapping into a $30 million revolving credit facility. The structure of the deal aims to optimize earnings during the first 7-8 years while supporting debt reduction efforts in the upcoming 12-24 months.
Ecora Resources has secured a strategic $50 million streaming deal for the Mimbula copper mine, reinforcing its commitment to copper and broadening its portfolio in the critical minerals sector. The operational expansion and financial strategy indicate confidence in long-term profitability. The proactive financing approach aims to enhance cash flow and support debt reduction, beneficially positioning Ecora in the copper market.
Original Source: www.mining.com
