TORONTO,
April 8, 2014 /CNW/ - Copper One
Inc. (CUO-TSX:V) ("Copper One" or the "Company") has
entered into a definitive purchase agreement (the "Purchase
Agreement") with FQM (Akubra) Inc. ("FQM (Akubra)"), a wholly-owned
subsidiary of First Quantum Minerals Ltd.(FM-TSX) ("First
Quantum"), to acquire a 100% interest in the past producing Troilus
Mine, which has estimated Measured and Indicated mineral resources
of 1.4 million ounces of gold and 100 million pounds of copper and
an Inferred resource of 300,000 ounces of gold and 25 million
pounds of copper (See Table 1).
The current compliant mineral resource estimate
was calculated using a gold price of US$450, a copper price of US$1.10 and a 0.8 g/t gold cut-off grade. The
Company believes material additions to the existing mineral
inventory can be made by recalculating the mineral resource
estimate using current commodity assumptions. In addition, the
mineral deposit extends below the current mineral resource both
down dip and laterally. The Company is currently reviewing the
drill database of some 300,000m across the Troilus property.
Scott Moore,
President and CEO of Copper One stated, "We are extremely excited
to have acquired such an outstanding project in this market.
The Troilus Mine has substantial resources in the ground with a
strong potential to grow additional resources. In addition,
the infrastructure at Troilus gives us a fast track to move this
project through the development phase over the next twelve months
while we work to expand the resources."
Mr. Moore further stated "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/t gold. We believe that like Goldex, under the
current market conditions, Troilus could have a second profitable
life. 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."
Project Description
The Troilus property is located approximately
175 km by road from the town of Chibougamau, Quebec, Canada. The Troilus
property consists of 81 mineral claims and one surveyed mining
lease that collectively cover 6,422 hectares. The acquisition will
include all infrastructures such as roads, power lines, camp
buildings, permitted tailings pond, and associated water treatment
facilities. The mill was sold and removed during the first phase of
reclamation.
Table 1 - Z87 Underground Mineral Resource Estimate,
December 2005
Category |
Tonnes |
Cu % |
Au g/t |
Cu
(x1000 lbs) |
Au
ounces |
Measured |
- |
- |
- |
- |
- |
Indicated |
29,400,000 |
0.16 |
1.48 |
105,000 |
1,400,000 |
Total M&I |
29,400,000 |
0.16 |
1.48 |
105,000 |
1,400,000 |
Inferred |
7,900,000 |
0.14 |
1.18 |
24,800 |
300,000 |
To the best of the Company's knowledge,
information, and belief, there is no new material scientific or
technical information that would make the disclosure of this
mineral resource inaccurate or misleading. The mineral
resource estimate reported above is based on the following
assumptions, as reported in the technical report entitled
"Technical Report on the Troilus Mine Z87 Underground Mineral
Resource Estimate, Quebec,
prepared for Inmet Mining Corporation" dated April 28, 2006 (the "Technical Report") and
prepared by Luke Evans, M.Sc.,
P.Eng, Executive Vice President, Geology and Resource Estimation,
Roscoe Postle Associates Inc., a Qualified Person as defined by
National Instrument 43-101.
• Gold price: US $450 per ounce
• Copper price: US $1.10 per
pound
• Cut-off grade: 0.80 grams of gold per tonne
Troilus History
Inmet Mining Corporation ("Inmet") commissioned
the Troilus mill in 1996 and achieved commercial production in
April 1997 at a rate of 10,000 tonnes
per day. Inmet eventually increased production to 18,000 tonnes per
day, with recoveries of 86% Au and 90% Cu and a concentrate grade
of 18% Cu.
The Troilus mine produced in excess of 2 million
ounces of gold and 50,000 tonnes of copper prior to its closure in
2010. First Quantum acquired the Troilus property through its
acquisition of Inmet in 2013.
The extension of the Troilus deposit below the
87 pit has been known for some time and early studies indicated
potential for underground production to extend the mine life. A
drilling program undertaken in 2005 allowed estimation of an
Indicated Mineral Resource of 29.4 million tonnes at a grade of 1.5
grams per tonne gold and 0.16 percent copper. The Technical Report
on the underground resource was completed by Luke Evans, M.Sc., P.Eng, from Roscoe Postle
Associates Inc. (RPA) in April 2006
and filed on SEDAR on May 1,
2006.
Purchase Agreement
Under the terms of the Purchase Agreement,
8815046 Canada Ltd. ("8815046"), a wholly-owned subsidiary of
Copper One, will acquire 100% of the Troilus property by assuming
all obligations and liabilities relating the property effective as
of January 1, 2014, including the
remaining obligations of FQM (Akubra) pursuant to the closure plan
for the Troilus mine (the "Closure Plan"), and granting to FQM
(Akubra) a royalty of 2.5% of the net smelter returns in connection
with all minerals extracted from the property (the "Proposed
Transaction"). The royalty granted to FQM (Akubra) will be secured
with a first ranking security interest in the claims and the mining
lease comprising the Troilus property and production therefrom.
Copper One has agreed to guarantee the obligations of 8815046
pursuant to the Purchase Agreement, including the net smelter
returns royalty.
As a condition precedent to the Proposed
Transaction, Copper One will be required to post letters of credit
in favour of the Ministère des Ressources Naturelles, the Ministère
des Finances et de l'économie and the Ministere du Developpement
Durable, L'Environment, Faune et Parcs totaling approximately
$4.1 million to secure the
performance of the remaining obligations under the Closure Plan
(the "Letters of Credit"). First Quantum has agreed to guarantee
Copper One's obligations pursuant to the Letters of Credit until
the earlier of two years from the closing date of the Proposed
Transaction or Copper One having working capital in excess of
$10 million. Copper One has agreed to
pay First Quantum a guarantee fee equal to 5% per annum of the
aggregate amount of the Letters of Credit outstanding.
The completion of the Proposed Transaction
remains subject to other customary conditions precedent, including
governmental and third party consents.
Qualified Person
The scientific and technical information in this
news release has been reviewed and approved by Luke Evans, M.Sc., P.Eng, Executive Vice
President, Geology and Resource Estimation, RPA, a consultant to
the Company and a Qualified Person as defined by National
Instrument 43-101. Luke Evans
prepared the Technical Report for Inmet and has reviewed the
Technical Report on behalf of Copper One.
About Copper One
Copper One is focused on developing high-value
copper and gold projects in leading mining jurisdictions. The
Company is part of the Forbes & Manhattan Group of Companies
which has built, operated and sold mines in Canada and globally. The Copper One portfolio
includes the Rivière Doré copper-nickel project, located near
Val d'Or, Quebec, and the Queylus
copper-gold project, located in the Chibougamau mining district in Quebec.
Cautionary Note Regarding Forward-looking
Information
This press release contains "forward-looking
information" within the meaning of applicable Canadian securities
legislation. Forward-looking information includes, but is not
limited to, statements regarding the estimation of mineral
resources and the Company's plans for the Troilus property.
Generally, forward-looking information can be identified by the use
of forward-looking terminology such as "plans", "expects" or "does
not expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or state that
certain actions, events or results "may", "could", "would", "might"
or "will be taken", "occur" or "be achieved".
Forward-looking information is subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of the Company to be
materially different from those expressed or implied by such
forward-looking information, including but not limited to: general
business, economic, competitive, political and social
uncertainties; the actual results of current exploration
activities; future prices of mineral prices; failure of plant,
equipment or processes to operate as anticipated; accidents, labour
disputes and shortages and other risks of the mining industry.
Although the Company has attempted to identify important factors
that could cause actual results to differ materially from those
contained in forward-looking information, there may be other
factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such information will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking information. The Company does not undertake to
update any forward-looking information, except in accordance with
applicable securities laws.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE Copper One Inc.
Image with caption: "Troilus Mine Location Map (CNW Group/Copper
One Inc.)". Image available at:
http://photos.newswire.ca/images/download/20140408_C9041_PHOTO_EN_38995.jpg
Image with caption: "Aerial View of Troilus Mine (CNW
Group/Copper One Inc.)". Image available at:
http://photos.newswire.ca/images/download/20140408_C9041_PHOTO_EN_38996.jpg