Cupric Canyon Capital has secured a $565m funding package to start development of its Khoemacau copper silver mine in Botswana.
The Khoemacau copper silver mine is located in a remotely located region of northwest Botswana in the Kalahari Desert. The underground mining project comprises more than 4,040km2 of mineral concessions.
The project funding package secured by Cupric Canyon will be used for construction of the Starter Project at the copper silver mine. The Starter Project with a capacity of 3.6 million tons per annum will process ore from the 91 million ton resource at a head grade of 2.02% copper and 21.4g/t silver copper.
For the funding of the project, Cupric Canyon signed agreements with RGLD Gold (RG) and Red Kite Mine Finance (RKMF).
RG agreed to provide $265m of funding under a silver purchase and sale agreement. RKMF, on the other hand, will provide $250m of funding to draw down for construction of the Starter Project along with $25m of capitalized interest.
Cupric Canyon CEO Johan Ferreira said: “Securing the Project Funding Package by partnering with two of the industry’s leading global providers of mine finance, Royal Gold and Red Kite, allows us to move forward energetically with all project development activities.
“This step marks the completion of a remarkable evolution of the Company from discovery of Zone 5 in 2012 to full construction of a high-quality copper asset in 2019.”
Cupric Canyon revealed that the direct construction cost of the Starter Project is $397m over a two-year construction period.
Financial close on the project is likely to occur early in the second quarter of 2019, said the company, which expects first copper concentrate to be produced in the first half of 2021 followed by subsequent ramp-up.
The initial annual production of the Starter Project will be averaging 62,000 tons of copper and 1.9 million ounces of silver over a 21-year mine life.
The Starter Project involves the fully mechanized underground mining of sulphide ores at Zone 5 of the Khoemacau copper silver mine at a rate of 3.6 million tons per annum.
Apart from Zone 5, an additional 93.5 million tons of high-grade resource grading 1.9% copper and 33g/t silver is in place at the Khoemacau copper silver mine. Cupric Canyon intends to develop the resources in conjunction with the construction of the Starter Project.