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Los Andes Copper reports possible US$5 million sale of 2% NSR royalty by RCF


Los Andes Copper Ltd (TSXV:LA, OTCQX: LSANF) has reported that RCF VI CAD LLC has entered into a definitive agreement to sell its 2% NSR royalty on Los Andes’ Vizcachitas Copper Project which is owned by RCF pursuant to the latter’s royalty purchase agreement dated May 27, 2020. If the proposed sale is consummated, then RCF will owe Los Andes Copper a contingent purchase price payment of US$5,000,000 under the terms of the deal.

“We are very pleased to see the proposed sale by RCF to a company planning to complete a direct listing on the TSX-V in the near future,” said R. Michael Jones, CEO of Los Andes. “The royalty sale and future listing of a new base metal royalty company mark the growing recognition of our copper asset as a rare world class copper deposit at a time of growing interest in copper globally”.

Los Andes Copper is the 100% owner of the Vizcachitas large open pit copper project in Chile. If the sale goes through, then RCF will owe the Los Anes US$5,000,000 following the closing. The proposed sale is subject to the successful fundraising by the purchaser of the royalty and other closing conditions. Los Andes said this week that it can provide no assurance that the transaction will close as planned.

Los Andes Copper’s Vizcachitas Project

The Vizcachitas Project is a copper-molybdenum porphyry deposit, located 120 kilometres north of Santiago, in an area of good infrastructure. Los Andes’ Preliminary Economic Assessment delivered in June 2019, highlights that the project has a post-tax NPV of $ 2.7 billion and an IRR of 26.7%, based on a $3.50 per pound copper price. It also has a Measured Resource of 254.4 million tonnes having a grade of 0.439% copper and Indicated Resource of approximately 1.03 billion tonnes having a grade of 0.385% copper.

The PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as mineral reserves, and there is no certainty that the PEA will be realised.

Los Andes Copper reported earlier this month that it had closed a US$4m convertible debenture issued to Queen’s Road Capital Investment. It has as five year term and carries an 8% coupon. It is convertible into common shares of the capital of the company. The proceeds will be allocated towards the completion of the Vizcachitas project.

Further assay results expected imminently from Vizcachitas

Jones said this month that it was Los Andes’ objective to announce further drilling results, update the resource model and complete the feasibility study in the course of the rest of this year. Assay results from 8,297 metres of drilling are anticipated before the end of June. An updated resource estimate is expected in August.

“We have sufficient new drill intercepts completed that a resource update is warranted as soon as the assays are in, and we can finalize an updated mine plan and the Pre-Feasibility Study in the next few months,” Jones said. “There is further resource potential from additional step out drilling which is planned for a further 10,000 meters.”

Los Andes Copper has completed 8,297 meters of diamond drilling and has reported the results for the first hole, CMV-001B, of 1,177 meters of 0.50% copper equivalent near the northwest edge of the deposit. Two further holes have been completed approximately 100 meters west and 200 meters west of the CMV-001B intersection. A total of 4,221 meters in 5 holes are sampled and awaiting assay results and a further 2,811 meters of drilling from 5 holes are in the logging and sampling process. Results are expected to become available in the coming weeks.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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