Ecora Resources has secured a $50 million streaming deal for the Mimbula copper mine in Zambia. This agreement supports the mine’s operations over 11 years, strengthening Ecora’s focus on copper investments. The Mimbula project is advancing with significant production capacity and future expansions, enhancing Ecora’s earnings and cash flow prospects.
Ecora Resources, a company specializing in critical minerals royalties, has recently secured a $50 million streaming agreement concerning the Mimbula copper mine, operated by Moxico Resources in Zambia. This agreement is structured to cover the mine’s entire 11-year operational timeline based on its designated reserves, with opportunities for extension.
Marc Bishop Lafleche, the Chief Executive Officer (CEO) of Ecora, emphasized the strategic importance of this acquisition, stating it will fortify copper’s role within their investment portfolio while positively impacting earnings and free cash flow. Ecora currently manages over 20 royalty and streaming assets, diversifying its interests in essential minerals like copper, cobalt, and nickel.
The Mimbula project, located in Zambia’s Copperbelt Province near Chingola, commenced production in late 2022. It is currently in Phase 1, utilizing a heap leach combined with solvent extraction/electrowinning (SX/EW) process, producing copper cathodes with a purity of 99.999%, and has an annual capacity of 10,000 tonnes. A Phase 2 expansion is in progress, projected to boost production capacity to 56,000 tonnes per annum.
Lafleche praised the Mimbula project, highlighting its quality ore body, low operational costs, and effective management team, which has advanced the project efficiently. Following the first phase of the expansion, which doubled the cathode capacity to 20,000 tonnes per annum, the total production reached 14,000 tonnes in the previous year, with operational expenses aligning with the lower range among global copper producers.
Moxico Resources, holding 93% of the Mimbula project, anticipates concluding the expansion by early next year, with expectations to achieve full capacity by mid-2026. Furthermore, there are considerations for a Phase 3 development, which would involve constructing a processing facility for cobalt extraction, with the current resources indicating a total of 38.6 million tonnes at a cobalt grade of 0.037%.
Acquiring the Mimbula copper stream positions Ecora to amplify its copper growth potential in the forthcoming years. Post-transaction, copper and base metal investments may rise to nearly 45% and 75% of the company’s net asset value, respectively, while maintaining over 80% of royalties and streams in projects with competitive cost structures.
To finance this acquisition, Ecora will utilize a blend of available cash and debt resources, including $30 million from its revolving credit facility. The transaction is thoughtfully designed to maximize copper entitlement benefits during the initial 7 to 8 years, fostering earnings growth and aiding in the projected reduction of company debt over the next 12 to 24 months.
In summary, Ecora Resources has strategically invested $50 million in a streaming deal for the Mimbula copper mine, reinforcing its commitment to copper and enhancing overall earnings. The project, backed by an excellent management team, boasts promising production capabilities and ongoing expansions. This acquisition is expected to contribute significantly to Ecora’s growth and financial health in the coming years.
Original Source: www.mining.com
