Panoro Minerals Announces Receipt of Matching US$2.0 million Payment from Silver Wheaton for the Cotabambas Project, Peru
December 22 2016 - 4:15PM
Panoro Minerals Ltd. (TSXV:PML) (Lima:PML)
(Frankfurt:PZM) and its wholly-owned subsidiary, Panoro Trading
(Cayman) Ltd. (“Panoro” or the “Company”) are pleased to announce
that they have received a third payment of US$2.0 million as part
of the Precious Metals Purchase Agreement (the “Cotabambas Early
Deposit Agreement”) with Silver Wheaton (Caymans) Ltd., a wholly
owned subsidiary of Silver Wheaton Corp. ("Silver Wheaton")
(TSX:SLW) (NYSE:SLW) in respect of the Cotabambas project located
in Peru.
The principal terms of the Cotabambas Early
Deposit Agreement are as described in the Company’s press release
on March 21, 2016, whereby Silver Wheaton will pay Panoro upfront
cash payments totalling US$140.0 million for 25% of the payable
gold production and 100% of the payable silver production from the
Company’s Cotabambas Project in Peru. In addition, Silver Wheaton
will make production payments to Panoro of the lesser of the market
price and US$450 per payable ounce of gold and US$5.90 per payable
ounce of silver delivered to Silver Wheaton over the life of the
Cotabambas Project.
Panoro is entitled to receive US$14.0 million
spread over a period of up to 9 years as an early deposit with
payments to be used to fund general and administrative expenses
related to the Cotabambas Project. The Cotabambas Early
Deposit Agreement includes provisions to accelerate these payments
through Silver Wheaton’s matching, up to certain limits, any third
party financing of Panoro targeted for exploration at the
Cotabambas Project. The balance of the US$140.0 million, should
Silver Wheaton elect to proceed with the Cotabambas Early Deposit
Agreement, is payable in installments during construction of the
Cotabambas Project.
The payment of US$2.0 million comprises the
matching payment for Year 1 of the Cotabambas Early Deposit
Agreement whereby, pursuant to the Cotabambas Early Deposit
Agreement, Silver Wheaton is required to match up to US$2.0 million
of any financing Panoro raises from third parties for investment
into the Cotabambas Project. Panoro announced the closing of
a C$6.6 million financing on August 29, 2016, whereby the principal
use of proceeds is investment into the Cotabambas Project,
including:
- Step-out drilling to expand the oxide copper resource and
assessment of the potential to incorporate a heap leach SX/EW
process into the project plan;
- Exploration geophysics and drilling at the Maria Jose target to
add near surface high grade mineralization to the mill feed;
and
- Metallurgical testing to test for potential improvement in
recoveries from all four mineralogical types in the current
resource.
With the receipt of this matching payment,
Panoro will have closed the following financings in 2016 totalling:
C$12.0 million.
- C$5.4 million (US$4.0 million) from Cotabambas Early Deposit
Agreement; and
- C$6.6 million from the private placement on August 29,
2016.
Panoro has commenced pre-drilling work at the
Cotabambas Project. The Company expects to finalize the
renewal of a community agreement at the Cotabambas Project shortly,
after which it will commence a geophysical survey and other work
leading to commencement of drilling at the Maria Jose prospect.
About Panoro
Panoro is a uniquely positioned copper
exploration company focused on Peru. Panoro is advancing its
significant portfolio of copper and gold projects in the key
Andahuaylas-Yauri belt in south central Peru, including its
advanced stage Cotabambas Copper-Gold-Silver-Molybdenum and Antilla
Copper-Molybdenum Projects.
Since 2007, the Company has completed over
70,000 m of exploration drilling at these two key projects leading
to substantial increases in the resource base for each. The
mineral resources for each project are summarized in the table
below.
Summary of Cotabambas and Antilla
Project Resources
Project |
Resource Classification |
Million tonnes |
Cu (%) |
Au (g/t) |
Ag (g/t) |
Mo (%) |
Cotabambas Cu/Au/Ag |
Indicated |
117.1 |
0.42 |
0.23 |
2.74 |
0.001 |
Inferred |
605.3 |
0.31 |
0.17 |
2.33 |
0.002 |
@ 0.20% Cueq cutoff, effective October 2013,
Tetratech |
Antilla Cu/Mo |
Indicated |
291.8 |
0.34 |
- |
- |
0.01 |
Inferred |
90.5 |
0.26 |
- |
- |
0.007 |
@ 0.175% Cueq cutoff, effective May 2016,
Tetratech |
Panoro has completed Preliminary Economic
Assessments (PEA) for both projects, the key results for which are
summarized below.
Summary of Cotabambas and Antilla
Project PEA Results
Key Project Parameters |
Cotabambas Cu/Au/Ag Project |
Antilla Cu/Mo Project |
Mill Feed, life of mine |
Million tonnes |
483.1 |
350.4 |
Mill Feed grade,life of mine |
% Cu |
0.32 |
0.31 |
g/t Au |
0.18 |
- |
g/t Ag |
2.37 |
- |
% Mo |
- |
0.009 |
Mill Feed, daily |
tonnes |
80,000 |
40,000 |
Strip Ratio, life of mine |
|
1.25 : 1 |
0.85 : 1 |
Before Tax1 |
NPV7.5% |
Million USD |
1,053 |
491 |
IRR |
% |
20.4 |
22.2 |
Payback |
years |
3.2 |
3.3 |
After Tax1 |
NPV7.5% |
Million USD |
684 |
225 |
IRR |
% |
16.7 |
15.1 |
Payback |
years |
3.6 |
4.1 |
Annual Average Payable Metals |
Cu |
Thousand tonnes |
70.5 |
36.8 |
Au |
Thousand ounces |
95.1 |
- |
Ag |
Thousand ounces |
1,018.4 |
- |
Mo |
Thousand tonnes |
- |
0.9 |
Initial Capital Cost |
Million USD |
1,530 |
603 |
Project economics estimated at commodity prices
of; Cu = US$3.00/lb, Au = US$1,250/oz, Ag = US$18.50/oz, Mo =
US$12/lb |
The PEAs are considered preliminary in nature
and include Inferred Mineral Resources that are considered too
speculative to have the economic considerations applied that would
enable classification as Mineral Reserves. There is no certainty
that the conclusions within the updated PEA will be realized.
Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability.
Luis Vela, a Qualified Person under National
Instrument 43-101, has reviewed and approved the scientific and
technical information in this press release.
On behalf of the Board of Panoro
Minerals Ltd.
Luquman A. Shaheen, M.B.A., P.Eng., P.E.President & CEO
CAUTION REGARDING FORWARD LOOKING
STATEMENTS: Information and statements
contained in this news release that are not historical facts are
“forward-looking information” within the meaning of applicable
Canadian securities legislation and involve risks and
uncertainties. Examples of forward-looking information and
statements contained in this news release include information and
statements with respect to:
- payment by Silver Wheaton of US$140 million in
installments;
- Panoro making targeted investments into exploration at the
Cotabambas Project;
- mineral resource estimates and assumptions;
- the PEA, including, but not limited to, base case parameters
and assumptions, forecasts of net present value, internal rate of
return and payback; and
- copper concentrate grade from the Cotabambas Project.
Various assumptions or factors are typically
applied in drawing conclusions or making the forecasts or
projections set out in forward-looking information. In some
instances, material assumptions and factors are presented or
discussed in this news release in connection with the statements or
disclosure containing the forward-looking information and
statements. You are cautioned that the following list of
material factors and assumptions is not exhaustive. The factors and
assumptions include, but are not limited to, assumptions
concerning: metal prices and by-product credits; cut-off grades;
short and long term power prices; processing recovery rates; mine
plans and production scheduling; process and infrastructure design
and implementation; accuracy of the estimation of operating and
capital costs; applicable tax and royalty rates; open-pit design;
accuracy of mineral reserve and resource estimates and reserve and
resource modeling; reliability of sampling and assay data;
representativeness of mineralization; accuracy of metallurgical
test work; and amenability of upgrading and blending
mineralization.
Forward-looking statements are subject to a
variety of known and unknown risks, uncertainties and other factors
which could cause actual events or results to differ materially
from those expressed or implied by the forward-looking statements,
including, without limitation:
- risks relating to metal price fluctuations;
- risks relating to estimates of mineral resources, production,
capital and operating costs, decommissioning or reclamation
expenses, proving to be inaccurate;
- the inherent operational risks associated with mining and
mineral exploration, development, mine construction and operating
activities, many of which are beyond Panoro’s control;
- risks relating to Panoro’s ability to enforce Panoro’s legal
rights under permits or licenses or risk that Panoro’s will become
subject to litigation or arbitration that has an adverse
outcome;
- risks relating to Panoro’s projects being in Peru, including
political, economic and regulatory instability;
- risks relating to the uncertainty of applications to obtain,
extend or renew licenses and permits;
- risks relating to potential challenges to Panoro’s right to
explore and/or develop its projects;
- risks relating to mineral resource estimates being based on
interpretations and assumptions which may result in less mineral
production under actual circumstances;
- risks relating to Panoro’s operations being subject to
environmental and remediation requirements, which may increase the
cost of doing business and restrict Panoro’s operations;
- risks relating to being adversely affected by environmental,
safety and regulatory risks, including increased regulatory burdens
or delays and changes of law;
- risks relating to inadequate insurance or inability to obtain
insurance;
- risks relating to the fact that Panoro’s properties are not yet
in commercial production;
- risks relating to fluctuations in foreign currency exchange
rates, interest rates and tax rates; and
- risks relating to Panoro’s ability to raise funding to continue
its exploration, development and mining activities.
This list is not exhaustive of the factors that
may affect the forward-looking information and statements contained
in this news release. Should one or more of these risks and
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described
in the forward‑looking information. The forward‑looking
information contained in this news release is based on beliefs,
expectations and opinions as of the date of this news
release. For the reasons set forth above, readers are
cautioned not to place undue reliance on forward-looking
information. Panoro does not undertake to update any
forward-looking information and statements included herein, except
in accordance with applicable securities laws.
Neither the 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.
FOR FURTHER INFORMATION, CONTACT:
Panoro Minerals Ltd.
Luquman A. Shaheen, President & CEO
Phone: 604.684.4246 Fax: 604.684.4200
Email: info@panoro.com
Web: www.panoro.com
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