AuTECO Minerals Ltd (ASX:AUT, OTC:MNXMF) is acquiring the Green Bay Copper-Gold Project, a substantial high-grade copper-gold resource in Newfoundland, Canada with the potential for rapid growth, for a total consideration of ~A$65 million.
The Green Bay project includes the Ming Mine and Nugget Pond processing facility previously operated by Rambler Metals and Mining Canada Limited, a subsidiary of previously AIM-listed Rambler Mining and Metals PLC.
This acquisition transforms AuTECO into a significant copper company, with Green Bay’s current resources standing at 811,000 tonnes of contained metal at a significant grade of 2.1% copper equivalent.
+A$250 million of infrastructure
Green Bay was last mined in early 2023 with the operation on care and maintenance since.
The purchase comes with +A$250 million of infrastructure, including an accessible decline, extensive underground development, a 650-metre shaft, processing plant, port infrastructure and adjacent hydropower.
The transaction comprises an upfront consideration of A$35 million in cash and A$15 million in shares, followed by an additional A$7.5 million cash payment and A$7.5 million in shares within 18 months.
A$50 million placement
The transaction will be funded by a minimum A$50 million two-tranche placement to be sole lead managed by Canaccord Genuity (TSX:CF, LSE:CF), and co-managed by Argonaut Securities, Euroz Hartleys, and Shaw and Partners.
Retail investors will have the opportunity to participate in a A$3 million share purchase plan (SPP) at the same price as the placement.
AuTECO board and management will subscribe for up to A$5 million of the capital raising, subject to shareholder approval.
The proceeds from the placement will be used for the upfront cash consideration and to fund an accelerated resource growth program that includes plans for 700 metres of underground exploration development and 40,000 metres of drilling to start immediately.
Sources and use of funds.
Following their success at Bellevue Gold and subject to shareholder approval of the acquisition, the AuTECO executive team will be boosted with the appointment of Steve Parsons as managing director and Michael Naylor as executive director.
Parsons previously served as managing director and Naylor was executive director of Bellevue Gold, which is developing one of Australia’s highest-grade gold mines, with a resource of 3.1 million ounces.
Highly regarded geologist Darren Cooke will remain as chief executive officer of AuTECO, ensuring the core strategy to grow the resource is underpinned by substantial exploration skills and experience.
Phase 1 growth program schedule.
Parsons said Green Bay is a rare and outstanding acquisition opportunity that had only come about because the company that owned it had been placed in the Canadian equivalent of administration.
“Green Bay is an exceptional acquisition opportunity, and we were extremely fortunate to be given the opportunity to acquire this asset via the administration process,” Mr Parsons said.
“It is very rare for a copper asset of this size and grade with a resource of this magnitude and such immense growth potential to come up anywhere in the world, let alone in a tier-one mining location like the province of Newfoundland and Labrador.
“The potential to grow the mineral resource quickly is abundantly clear, with extensive high-grade mineralisation intersected down-plunge and highly promising exploration upside in positions parallel and along strike from the existing resource”.
Indicative timetable.
Parsons said the capital raising would enable AuTECO to immediately establish an exploration decline with the aim of rapidly growing resources around historical intersections such as 102 metres at 1.7% copper.
This intersection is 460 metres down plunge of the current resource boundary.
The exploration drive will also allow definition of the upper high-grade Ming North VMS horizon which has demonstrated continuity as evidenced by a drill hole returning 74.8 metres at 9% copper and 2.2g/t gold.
“Focus on growing the resource as quickly as possible”
“Our initial focus will be solely on growing the resource as quickly as possible. We believe this is where the immediate value uplift for shareholders will arise,” Mr Parsons said.
“That’s why we have already planned 40,000 metres of diamond drilling.
“An increased resource is also the pathway to longer mine life and increased production rates, which will in turn significantly boost the project’s economic outlook and the returns for all stakeholders.”
The Ming mine was originally mined between 1972 and 1982, before mining resumed in 2012. Historical production totalled 6.7 million tonnes at 2.0% for 134,000 tonnes of copper.
Ming contains a decline and shaft accessible to 950 metres below surface, providing multiple drill-ready platforms to test standout in-mine exploration targets.
Long section of the Ming mine showing key growth targets and planned drill platforms.
Other infrastructure that forms part of the acquisition includes a 500,000 tonnes per annum processing facility that consists of a conventional grinding and flotation circuit at the Nugget Pond site and concentrate storage facility at the nearby deep water Goodyear’s Cove port.