Canadian copper developer Arizona Sonoran Copper (ASCU) has signed an option agreement to set up a joint venture (JV) with Nuton, a subsidiary of Rio Tinto, for the Cactus project in Arizona, US.
As part of the JV, Nuton’s copper leach-related technologies will be deployed at the project, which comprises the Cactus mine and Parks/Salyer project.
Under the agreement, two of ASCU’s subsidiaries, Arizona Sonoran Copper Company (USA) (AUSA) and Cactus 110 (Cactus), will form the JV with Nuton.
AUSA has granted Nuton an exclusive right and option to acquire between a 35% and 40% interest in its Cactus project.
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The JV agreement provides for total funding of up to $33m (C$44.15m) in cash. It will include $10m, which is payable by Nuton to ASUSA.
AUSA can draw up to $11m as pre-payment to be used for certain land payments and up to $12m to be paid to ASCU for costs associated with Nuton’s test work needed to produce an integrated prefeasibility study (PFS).
ASCU stated that through the JV, a mechanism for significant project funding is created that can minimise its own future share of equity contributions to capital costs.
ASCU president and CEO George Ogilvie said: “We are delighted to announce this strategic joint venture transaction with Nuton. We welcome the expertise and financial support as we expand testing of Nuton’s heap leaching technologies, while concurrently advancing ASCU’s projects.
“Nuton’s column test results have demonstrated continued improvements in extraction rates from both the primary and enriched mineral resources, resulting in potentially more efficient operations. We look forward to advancing into Phase 2 testing, which includes an expanded understanding of the Nuton technologies’ economic benefits within a fully integrated pre-feasibility study, anticipated by the end of 2024.”
Nuton CEO Adam Burley said: “We are pleased to be advancing our strategic partnership with ASCU. Successful deployment of Nuton Technologies at Cactus and Park/Salyer has the potential to materially enhance the economic and environmental performance of the projects.”
The Cactus project includes three deposits, namely Cactus East, Cactus West and Parks/Salyer, along with one waste dump within 4km mine trend.
A preliminary economic assessment (PEA) in 2021 showed that the project can produce around 28 kilotons per annum over 18 years. A PFS is being targeted to step up the estimate to 45 kilotons per annum.
In April 2022, Rio Tinto agreed to invest $23.7m in ASCU and acquire a 7.4% stake in the company.