Anglo-Australian mining giant Rio Tinto is set to invest in copper producer Arizona Sonoran Copper (ASCU) as part of the latter’s $23.7m (C$30.5m) non-brokered private placement.
Rio Tinto will subscribe for 6.4-million shares in the copper producer while private equity firm Tembo Capital Elim Co-Investment will subscribe for 3.9-million shares at a discounted price of C$2 a share.
Upon completion of the private placement, Rio Tinto will own 7.4% in US-based ASCU’s outstanding share capital.
Tembo’s holding in the outstanding share capital will be reduced from 37.6% to 35.5%.
ASCU president and CEO George Ogilvie said: “This private placement provides the company with significantly more capital to explore opportunities to deliver scale to the main project, by way of intensive exploration at Parks/Salyer (P/S) and metallurgical testing of the primary chalcopyrite material at Cactus, which is not currently in the Preliminary Economic Assessment (PEA) mine plan.”
The copper producer plans to utilise the offering’s net proceeds to support more drilling work, along with exploration, project and study work on the Cactus Mine Project.
It will also use the proceeds for general corporate purposes.
Rio Tinto Copper chief operating officer Clayton Walker said that the investment will allow it to work with ASCU to evaluate the potential of deploying Nuton copper leaching technologies at the Cactus copper mine located on private land in western Pinal County, Arizona.
Walker stated: “Nuton provides the opportunity to unlock additional copper and deliver environmental benefits including a low carbon footprint and reduced waste.”
Rio Tinto’s Nuton offers a portfolio of copper leach related technologies, aimed at more copper recovery with enhanced environmental performance.
The offering, which is planned to close on or about 13 May 2022, is pending the clearance of the TSX and the securities regulatory authorities.