World Copper has signed a definitive agreement to acquire Cardero Resource, which owns the advanced-stage Zonia copper-oxide project in central Arizona, US.
In April 2021, the Canadian firm entered a letter agreement to acquire Cardero in an all-stock deal via a business combination between the two firms.
According to the letter agreement, World Copper would acquire all of the Cardero outstanding common shares by issuing 40% of the issued and outstanding shares of World Copper. The remaining 60% would be held by existing WCU shareholders.
However, an amended agreement was signed in June whereby Cardero controlling shareholder Robert Kopple was granted an option to acquire a 1% net smelter returns royalty on the Zonia project by paying World Copper approximately $1.1m (C$1.41m).
World Copper CEO Nolan Peterson said: “The signing of the definitive agreement with Cardero is another milestone for World Copper and one that will bring significant value to our shareholders.
“Our team sees upside potential at Zonia that has, to this point been unrealised, including a low-cost development and permitting path. We will apply the same knowledge and expertise to Zonia, as we have to our Escalones property, and work to advance and de-risk the project going forward.”
In accordance with the definitive agreement, a wholly owned subsidiary of World Copper will merge with Cardero and continue as a single corporation.
Upon completion of the transaction, the outstanding and unexercised stock options of Cardero will be cancelled.
Moreover, World Copper will assume certain debt of Cardero owed to Robert Kopple and/or entities associated with him.
World Copper’s board of directors will be reconstituted whereby two of its directors would be Cardero nominees.
The Zonia copper-oxide project has been drill-tested with almost 700 drill holes (60,000m) and held under private ownership for almost 100 years.