Cyprium Metals to secure highly attractive WA copper portfolio

Cyprium Metals Ltd (ASX:CYM) has entered into a share sale agreement with Metals X Limited (ASX:MLX) to acquire that company’s Western Australian copper assets. This includes 100%-owned entity Paterson Copper Pty Ltd, owner of the Nifty Copper Mine, Maroochydore Copper Project and the Paterson Exploration Project, which includes a farm-in agreement with IGO Ltd (ASX:IGO). CYM has agreed to pay Metals X a total of A$60 million upon completion of the transaction comprising a cash payment of A$24 million and convertible notes with a face value totalling A$36 million. It will also replace the financial assurances relating to Nifty which equate to around A$6.5 million, with effect from completion. $90 million placement The company has received binding commitments to fund the transaction through a A$90 million placement to professional and sophisticated investors. This transaction will rapidly advance several of Cyprium’s previously stated objectives that include building a mid-tier Australian copper mining business by acquiring a portfolio of projects. “An outstanding portfolio” Cyprium executive director Barry Cahill said: “This is a truly transformational transaction for Cyprium which provides us with an outstanding portfolio of copper projects. “We have regularly ranked Nifty at the top of our Australia copper project acquisition target list and are delighted to have secured this as part of our quality suite of copper development projects. “Nifty and Maroochydore are a perfect fit for the skill set of our management team, who have a track record of creating value and producing copper, as most recently demonstrated with Finders Resources at the Wetar Copper Project.” Market fundamentals He said: “With favourable market fundamentals for copper, the acquisition of this portfolio represents an outstanding opportunity to generate significant value by securing more than 1.1 million tonnes of contained copper at Nifty and Maroochydore, including significant infrastructure, as well as the extensive Paterson Exploration JV with IGO in the highly prospective Paterson Province. “We are excited about the opportunity to execute our simplified development plan which consists of an open-pit mining operation, feeding a heap leach and SX-EW processing flowsheet. “Cash flows generated are intended to be utilised towards the development of Maroochydore and Cyprium’s existing Murchison copper-gold projects.” Overview of assets The Nifty Copper Mine, Maroochydore Copper Project and the Paterson Exploration Project are in the northeast Pilbara region of Western Australia, approximately 330 kilometres east-southeast of Port Hedland. Nifty Copper Mine The Nifty mine is on the western edge of the Great Sandy Desert in the north-eastern Pilbara region of Western Australia. Nifty has produced more than 700,000 tonnes of copper metal and the deposit is still ranked in the top 20 copper resources by copper tonnes in Australia, with considerable potential to increase further. Nifty retains a JORC 2012-compliant mineral resource of 658,500 tonnes contained copper via an open pit and underground mine. Maroochydore Copper Project The Maroochydore deposit is around 85 kilometres southeast of Nifty and includes shallow JORC 2012-compliant resources of 486,000 tonnes of contained copper, consisting of a significant oxide mineral resource of 43.5 million tonnes at 0.91% copper and a primary sulphide mineral resource of 5.43 million tonnes at 1.66%. Cyprium intends to commence drilling and a metallurgical test-work program with the emphasis to unlock the copper potential. Paterson Exploration Project Paterson Exploration Project covers more than 2,800 square kilometres, is highly prospective and in a region that hosts a number of substantial gold, gold-copper, copper and tungsten mines and deposits, including the Telfer Gold-Copper Mine. In mid-2020, Metals X signed an exploration joint venture with IGO on around 2,400 square kilometres area of the project. Under the agreement, IGO is to sole fund A$32 million of exploration activities over 6.5 years to earn a 70% interest in the project, including a minimum expenditure before the withdrawal of A$11 million over 3.5 years. And upon earning a 70% interest, a joint venture will form and IGO will free-carry Paterson Copper to the completion of a pre-feasibility study (PFS) on a new mineral discovery. Cyprium looks forward to partnering IGO in this joint venture during the initial expenditure stages. Acquisition funding The transaction and development of the copper assets are to be funded from existing cash reserves and the A$90 million placement. Cyprium has received binding commitments for the placement from professional and sophisticated investors in Australia and eligible investors in certain overseas jurisdictions. This placement will result in the issue of approximately 450 million fully paid ordinary shares at an offer price of 20 cents per share.