Canadian mineral exploration company Copper One is set to acquire a stake in the formerly producing Troilus Mine from First Quantum Minerals’s subsidiary FQM (Akubra).
Under the terms of the purchase agreement, Copper One’s wholly owned subsidiary, 8815046 Canada, will assume all obligations and liabilities relating the property effective as of 1 January 2014, to acquire 100% of the Troilus property.
This deal also includes the remaining obligations of Akubra pursuant to the closure plan for the mine and granting a royalty of 2.5% of the net smelter returns to the company in connection with all minerals that are extracted from the property.
The Akubra royalty will be received with a first ranking security interest in the claims and the mining lease consisting of the Troilus property and production therefrom.
Copper One will guarantee 8815046 obligations pursuant to the purchase agreement, including the net smelter returns royalty.
Located around 175km from the town of Chibougamau, Québec, the Troilus property consists of 81 mineral claims and one surveyed mining lease that collectively cover 6,422ha.
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All infrastructure will also be acquired, such as roads, power lines, camp buildings, permitted tailings pond and associated water treatment facilities.
Troilus Mine has estimated measured and indicated mineral resources of 1.4 million ounces of gold and 100 million pounds of copper, and inferred resources of 300,000oz of gold and 25 million pounds of copper.
To calculate the current compliant mineral resource estimate, a gold price of $450, a copper price of $1.10 and a 0.8g per tonne cut-off grade was used.
Copper One president and CEO Scott Moore said that the Troilus Mine has substantial resources with a strong potential to grow.
"Agnico-Eagle’s Goldex mine, located outside of Val-d’Or, is a large tonnage, low-grade underground operation with a reserve grade of 1.5g per tonne of gold. We believe that, like Goldex, under the current market conditions, Troilus could have a second profitable life," Moore said.
"We are currently reviewing all available geological data and technical studies towards a potential restart of this exceptional Brownfield opportunity however, until a feasibility study is completed, there is no certainty the proposed operation will be economically viable."
Image: Map of Troilus Mine. Photo: courtesy of CNW Group/Copper One Inc.