Celsius Resources Ltd (ASX:CLA, AIM:CLA), through its wholly-owned subsidiary Makilala Holding Ltd (MMCI), has inked a deal with Sodor Inc for the latter to acquire 60% of MMCI.
This deal, signed on March 17, was worth PHP 300 million, or around A$8.2 million as at the date of the company’s announcement.
The company sees the deal as a “significant milestone”, enabling MMCI to apply for a mineral production sharing agreement (MPSA) for the MCB Project with the Philippine Government.
Under Philippine law, an MPSA can only be held by a company that is at least 60% Filipino-owned.
In addition, the company and its subsidiaries MHL, MMCI, and PDEP Inc. entered into an accompanying binding letter agreement with Sodor and its affiliate PMR Holding Corp. to agree on the timeline.
Importantly, the agreement provides that Sodor will only receive the shares in 60% of MMCI after it and its affiliate fund around US$43 million for a 30% economic interest in the MCB Project.
Funding commitment
If the funding commitment – the amount of which is contingent on a bankable feasibility study – for the project is not received within two years of signing the deal, the parties have agreed to rescind the deal.
The MCB Project will be composed of MMCI and PDEP, both wholly-owned subsidiaries of Celsius.
The Philippine Government has advised MMCI that it has otherwise met all other technical requirements to obtain the MCB Project’s required environmental and mining permits.
Celsius non-executive chairman and MMCI chairman and president Julito R Sarmiento said: “We are indeed honoured to have Sodor as our local partner in our vision to develop the MCB Project as a model for transformative mining in the Philippines.
“Our principles and visions are aligned, which is a powerful step towards developing and operating the MCB Project in a responsible and sustainable manner benefiting both our shareholders and local stakeholders.
“It has always been our commitment, particularly to the Balatoc Tribal Community, that central to the mine development is cultural respect, social development, and environmental protection. Sodor Inc. shares the same commitment and is thus a perfect partner in developing the MCB Project.”
About the MCB Copper-Gold Project
The MCB Copper-Gold Project is in the Cordillera Administrative Region in the Philippines, some 320 kilometres north of Manila.
It is the flagship project within the Makilala portfolio which also contains other key prospects in the pipeline for permit renewal/extension.
A maiden mineral resource estimate (MRE) was declared for the MCB Project in January 2021 – it consists of 313.8 million tonnes at 0.48% copper and 0.15 g/t gold, for 1.5 million tonnes of contained copper and 1.47 million ounces of gold, of which 290.3 million tonnes at 0.48% copper and 0.15 g/t gold is classified as indicated and 23.5 million tonnes as inferred.
A scoping study for the project was announced by CLA on December 1, 2021, which identified the potential for the development of a copper-gold operation with a 25-year mine life.
The scoping study was based on an underground mining operation and processing facility to produce a saleable copper-gold concentrate.
Scoping study highlights
Highlights from the scoping study include a post-tax net present value (NPV 8%) of US$464 million and an internal rate of return (IRR) of 31%, assuming a copper price of US$4.00 per pound and a gold price of US$1,695 per ounce.
Initial capital expenditure is estimated to be US$253 million with a payback period of around 2.7 years.
The designed mine production is matched to a 2.28-million-tonne-per-annum processing plant which will treat ore with an estimated average grade of 1.14% copper and 0.54 g/t gold for the first 10 years of planned production.