In a strategic move to expand its portfolio in energy minerals, Alligator Energy Ltd (ASX:AGE, OTC:ALGEF) announced last month its plan to invest in EnviroCopper Ltd (ECL), with an option to increase its stake up to 50.1% in the future.
Alligator and ECL signed a Subscription Agreement for the initial investment. On completion of this transaction, the two companies agreed to enter into a Shareholders’ Agreement, outlining the terms for Alligator's potential further investments in ECL.
The conditions precedent for the Subscription Agreement have now been met, which allow Alligator to proceed with its initial investment, amounting to approximately A$900,000 and secures Alligator a 7.8% interest in ECL.
ECL is a popular company, with mining giant BHP (ASX:BHP) Ltd continuing to fund part of the copper company’s field investigations, including a Site Environmental Lixiviant Trial (SELT) of copper ISR at Kapunda.
Read: Alligator Energy buys-in to South Australian in-situ recovery copper company
“Alligator is very pleased to confirm completion of all outstanding matters for the initial investment into EnviroCopper Ltd," Alligator CEO Greg Hall said
"This represents a unique opportunity for Alligator to participate in copper ISR technology, research and trials with an experienced team, plus assist as the projects potentially head towards commercial production.
“Alligator recently undertook a site visit to the Kapunda Copper ISR Project to inspect the successfully completed push-pull copper ISR test work, the results of which are being evaluated and finalised. We thank the staff and contractors of ECL for their ongoing work and progress.”
Why Alligator invested
Alligator’s investment in ECL broadens its exposure to the latter's skilled In-Situ Recovery (ISR) team and paves the way for collaborative advancements in this field.
A technical advisory committee is set to be established, enabling Alligator to play an active role in assisting ECL with its planned in-situ trial work across various projects. This collaboration extends to the joint application of any intellectual property developed through these endeavours.
ECL boasts a team with extensive experience in exploring, researching and developing ISR methods for extracting copper from shallow fractured rock aquifer-hosted oxide copper deposits. This expertise is expected to continue evolving within ECL's current portfolio and future prospects.
The synergy between Alligator's investment in ECL and their own substantial in-house ISR knowledge is highly complementary. This collaboration not only enhances Alligator's existing ISR capabilities but also extends its reach into an additional, increasingly sought-after commodity.
The investment and partnership align well with the South Australian Government's copper strategy, which aims for a production target of 1 million tonnes per annum within the state.
This strategy underscores the growing potential of ISR copper projects. ISR, a method successfully and economically utilized in several Australian and United States projects, offers notable advantages and environmental benefits over traditional open pit, crush, and heap leach methods, particularly for shallow oxide copper projects.