VANCOUVER, BC, Sept. 8, 2021 /CNW/ - Josemaria Resources
Inc. (TSX: JOSE) (OMX: JOSE) (OTCQB: JOSMF) ("Josemaria
Resources" or the "Company") is pleased to provide an operations,
management and financing update regarding the significant progress
made at its 100% owned copper-gold-silver project in the San Juan
Province, Argentina. View PDF.
Adam Lundin, CEO comments, "This
year has been transformational for Josemaria with significant
advancement in all major key aspects of the project. We are in a
fortunate position to have one of the largest and most advanced
copper projects in the world, located in the San Juan Province of
Argentina. The Company continues
to be encouraged by the level of support shown at the federal,
provincial, and local levels in Argentina to work collaboratively to move this
Project forward. Active engagement continues with all levels of
government, including discussions aimed at finalizing and securing
commercial and fiscal terms applicable to the Project and
Environmental Social Impact Assessment ("ESIA") approval. Josemaria
remains one of the largest undeveloped copper-gold projects in the
world, with a proven and probable reserve profile not found in any
other junior mining company: 6.7 billion pounds of copper, 7.0
million ounces of gold, 31 million ounces of silver." (See Table 1
below for details).
Operations Update
The Company continues to aggressively advance all critical areas
of the Josemaria Project including:
- Project Engineering: Engineering to date has made significant
advancements to de-risk and optimize the process flowsheet with
improvements in the crush/convey, grinding, flotation and tailings.
An area of significant progress is the grinding circuit reducing
the size of the SAG mills from 42 foot diameter to 40 foot mills
achieved through the implementation of 2-stage pebble crushing
while maintaining the 150 ktpd design throughput. The illustration
below shows the revised plant layout as of August 2021. The Project is proceeding to Basic
Engineering with the goal of completion during the second quarter
of 2022;
- Development, Infill and Exploration Drilling: planning to
execute a 65,000-metre drill program aimed primarily at providing
development/infill geo-metallurgical data and acquiring additional
site geotechnical information for key Project infrastructure and
pit configuration. Life of mine hydrogeology and aquifer modelling
will be updated with additional water well and piezometer drilling.
It is anticipated that up to 8 rigs will be active at the peak of
the drilling program. Management has a high degree of confidence
drilling will lead to mine life expansion and a significant portion
of inferred material moving into reserves. At site, camp expansion
activities are ahead of schedule, and drilling is expected to
commence in November. Regional Exploration program plans are being
finalized to test targets outside the current resource but adjacent
to the Project;
- ESIA Approval Process: following the submission of the ESIA in
February 2021, we continue our
engagement with the San Juan authorities in their evaluation
process. We anticipate the ESIA evaluation process to be completed
in 1H 2022; and
- Offsite infrastructure: including access road and electrical
power, and logistics studies are ongoing, aimed at finalizing plans
for integration into the design of the Project during Basic
Engineering.
Image: Josemaria Project Revised Plant Layout, August 2021
Management Update
Mr. Phil Brumit has been
appointed to the role of Executive Vice President Projects and
Operations. Mr. Brumit is a mining executive with over 40 years
experience in property evaluation, engineering, project management,
construction, start-up and operations within the industry, and is
extremely well known to the Lundin family given the leadership
positions he held at Minera Candelaria, a subsidiary of Lundin
Mining, as President and Managing Director where he managed the
rejuvenation and re-capitalization of the operations increasing
reserves and extending mine life while increasing profitability.
Prior to that Mr. Brumit oversaw development, construction,
operation, and expansion of the Tenke-Fungurume Mine (TFM) in the
Democratic Republic of Congo as
President of Freeport-McMoRan Africa Division and Senior
Advisor.
Mr. Reece Fuller has been
appointed to the role of Senior Vice President Projects, reporting
to Mr. Brumit, and will oversee the engineering and construction of
the Josemaria Project. Mr. Fuller is a Project Management executive
with over 28 years of experience in developing and managing mineral
and metallurgical process plant major capital projects from concept
phases, scope development and selection studies, basic engineering,
detailed engineering, procurement, construction, commissioning,
start up and handover. As VP Engineering & Construction, Mr.
Fuller led Engineering and Construction for Freeport's Grasberg mine 240,000 mtpd
underground block cave expansion. In the capacity of Director of
Engineering for Freeport-McMoRan's global capital projects, he led
the shaping effort for the Indonesia $US3
billion 2mtpa smelter project located in East Java Indonesia. Mr. Fuller also led the
successful commissioning and start up effort for the
Tenke-Fungurume Mine in the Democratic
Republic of Congo. The accelerated commissioning schedule
allowed the Tenke project to achieve a world class schedule. Mr.
Fuller has worked internationally in numerous countries including
the United States, Canada, United
Kingdom, Australia,
Argentina, Chile, Peru,
Indonesia, Philippines and Mongolia.
Josemaria Resources has added numerous team members to the
Company and additional recruiting efforts are ongoing as the
Company continues to assemble the Owner's Team that will be
responsible for constructing the Company's 100% owned Josemaria
Copper-Gold Project in San Juan, Argentina.
Financing Update
The Company is pleased to announce that it has entered into two
credit facilities totaling US$20 million (collectively
the "Facilities"), one with Lorito Holdings S.à.r.l. ("Lorito")
for US$10 million (the "Lorito Facility") and one with
Zebra Holdings and Investments S.à.r.l. ("Zebra") for US$10
million (the "Zebra Facility"). Lorito and Zebra, who report their
security holdings as joint actors, are insiders of the company and
are private corporations controlled by a trust settled by the
late Adolf H. Lundin. Proceeds from the Facilities will be
used to provide additional financial flexibility to fund the
Company's ongoing work programs and provide general working
capital. The Facilities provide an additional source of funds on
top of the $US19.4 million currently
available to be drawn under existing outstanding credit facilities
provided by Lorito and Zebra.
Commenting on the new credit facilities, CEO Adam
Lundin stated, "We appreciate the continued financial support
of our largest shareholders who remain committed to advancing the
Josemaria Project towards construction. The new credit facilities
will allow us to continue advancing all aspects of the Project,
while working closely with the Government to finalize commercial
terms."
Each of the Lorito Facility and the Zebra Facility will be
evidenced by a debenture (collectively the "Debentures") each of
which will be unsecured and will have a term of 18 months
ending March 7, 2023 (the "Maturity Date"). No interest
is payable during the term of the Debentures, however, any amount
of the Lorito Facility or the Zebra Facility remaining unpaid and
outstanding on or after the Maturity Date shall bear interest at a
rate of 5.00% per annum until repaid in full.
Subject to approval of the Toronto Stock Exchange (the "TSX"),
the terms of the Facilities include the Company issuing 25,000
common shares to each of Lorito and Zebra for an aggregate of
50,000 common shares of Josemaria (the "Common Shares") and an
additional 450 Common Shares per month for
each US$50,000 of the Lorito Facility or the Zebra
Facility outstanding from time to time up to the Maturity Date. All
securities issued in conjunction with the Facilities will be
subject to a four-month hold period under applicable securities
law.
The Common Shares to be issued pursuant to the terms of the
Debentures will be issued at a deemed price of $1.06 per
share, being the closing price of the Common Shares on the TSX
on September 7, 2021.
Subject to the approval of the TSX, the Company has also entered
into agreements with Lorito and Zebra (the "Agreements") to extend
the maturity dates of the $US27
million of debentures currently outstanding (US$7.6 million drawn) from November 25, 2021, to March 7, 2023 to align the maturity date on all
debentures. No other terms of the existing debentures have been
amended. As a result of the Debentures and the extension of
the maturity dates of the US$27
debentures currently outstanding, and subject to the approval of
the Toronto Stock Exchange (the "TSX"), up to an additional
8,128,006 Common Shares will be reserved for issuance pursuant to
terms of the US$20 Million Debentures
and the extension of the US$27
debentures currently outstanding. All securities issued will be
subject to a four-month hold period under applicable securities
law.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy the securities described herein in
the U.S., or in any jurisdiction in which such an offer or sale
would be unlawful. The securities described herein have not been
and will not be registered under the U.S. Securities Act of 1933,
as amended, or any U.S. state securities laws and may not be
offered or sold in the U.S. or to the account or benefit of a U.S.
person or a person in the U.S. absent registration or an applicable
exemption from the registration requirements.
Related Party Transactions
Lorito and Zebra are insiders of the Company. The issuance of
Common Shares to the insiders and the entering into the Facilities
and Agreements each constitute a "related party transaction"
pursuant to Multilateral Instrument 61-101 – Protection of Minority
Security Holders in Special Transactions ("MI 61-101"). The Company
is relying on the exemption from formal valuation and minority
shareholder approval requirements under MI 61-101, as the fair
market value of the Common Shares to be issued and the Facilities
do not exceed 25% of the market capitalization of the Company, as
determined in accordance with MI 61-101.
About Josemaria
Josemaria Resources Inc. is a natural resources company focused
on developing its advanced stage, 100% owned Josemaria Copper-Gold
Project in the San Juan Province of Argentina. A recently published Feasibility
Study (see "NI 43-101 Technical Report, Feasibility Study for the
Josemaria Copper-Gold Project, San Juan Province, Argentina" dated effective September 28, 2020 and filed on November 5, 2020) demonstrates a simple and
conventional open pit copper-gold project with robust economics and
a rapid payback period. Josemaria is a Lundin Group company and
works in partnership with the Lundin Foundation to execute best
practices in responsible mineral development in Argentina where the Lundins have a 30-year
track record of value creation. The Company is a reporting issuer
in all provinces and territories of Canada and its corporate head office is in
Vancouver, BC. The Company's
shares are listed on the TSX and on Nasdaq Stockholm under the
symbol "JOSE", and trade on the OTCQB under the symbol "JOSMF".
Additional Information
This is information that the Company is obliged to make public
pursuant to the EU Market Abuse Regulation. The information was
submitted for publication, through the agency of the contact person
set out below, on September 08, 2021
at 00:01 EDT.
On behalf of Josemaria Resources,
Adam Lundin,
President and CEO
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WKN: A2PN5S / ISIN: CA48086P1009
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This press release includes certain "forward-looking
information" and "forward-looking statements" (collectively
"forward looking information") within the meaning of applicable
securities legislation. All statements, other than statements of
historical fact, included herein, including, without limitation,
the Company's plans and expectations regarding the Josemaria
Project, future price of copper, gold and silver; the results of
the Feasibility Study and expected timelines; the timing and amount
of estimated future production; net present values and internal
rates of return at the Josemaria Project; recovery rates; payback
periods; costs of production; capital expenditures; costs and
timing of the development of the Josemaria Project; mine life; the
potential future development of the Josemaria Project and the
future operating or financial performance of the Company; the
anticipated use of proceeds from the Facilities, the ability of the
Company to satisfy the conditions of the Debentures, including
repayment of the Facilities upon their maturity and the issuance of
Common Shares thereunder, and the timing and success in obtaining
requisite regulatory (including TSX) approvals; the impact of
COVID-19 on the Company's operations, hyper-inflationary
accounting, the effect of government regulations (or changes
thereto) with respect to restrictions on production, export
controls and duties, income taxes, royalties, expropriation of
property, repatriation of profits, environmental legislation, land
use, water use, mine safety, approval processes and the receipt of
necessary permits are forward-looking information. Forward-looking
information is frequently, but not always, identified by words such
as "expects", "anticipates", "believes", "intends", "estimates",
"potential", "possible", and similar expressions, or statements
that events, conditions, or results "will", "may", "could", or
"should" occur or be achieved.
These forward-looking statements may also include statements
regarding perceived merit of properties; exploration plans and
budgets; mineral reserves and resource estimates; work programs;
capital expenditures; timelines; strategic plans; market prices for
precious and base metals; or other statements that are not
statements of fact. In addition, statements relating to "mineral
resources" and "mineral reserves" are deemed to be forward-looking
information, as they involve the implied assessment, based on
certain estimates and assumptions that the mineral resources and
mineral reserves described can be profitably produced in the
future.
Forward-looking information involves various risks and
uncertainties. There can be no assurance that such information will
prove to be accurate, and actual results and future events could
differ materially from those anticipated in such information.
Important factors that could cause actual results to differ
materially from the Company's expectations include the Company's
ability to finance the development of its Josemaria Project;
commodity price fluctuations; assumptions and discount rates being
appropriately applied to the Feasibility Study, uncertainty as to
whether there will ever be production at the Company's Josemaria
Project and any other future mineral exploration and development
properties; risks related to obtaining regulatory approvals with
respect to the issuance of Common Shares pursuant to the Facilities
and with respect to extension of the maturity dates of existing
debentures; risks related to the Company's ability to commence
production and generate revenues or obtain adequate financing for
its planned exploration and development activities; risks related
to lack of infrastructure including but not limited to the risk
whether or not the Josemaria Project will receive the requisite
permits and, if it does, whether the Company will build the
Josemaria Project; risks related to inclement weather which may
delay or hinder activities at the Company's mineral properties;
risks related to the Company's dependence on third parties for the
development of its projects; uncertainties relating to the
assumptions underlying resource and reserve estimates; mining and
development risks, including risks related to infrastructure,
accidents, equipment breakdowns, labor disputes, bad weather,
non-compliance with environmental and permit requirements or other
unanticipated difficulties with or interruptions in development,
construction or production; the geology, grade and continuity of
the Company's mineral deposits; the uncertainties involving success
of exploration, development and mining activities; permitting
timelines; risks pertaining to the outbreak of the global
pandemics, including COVID-19; government regulation of mining
operations; environmental risks; unanticipated reclamation
expenses; prices for energy inputs, labour, materials, supplies and
services; uncertainties involved in the interpretation of drilling
results and geological tests and the estimation of mineral reserves
and mineral resources; the need for cooperation of government
agencies and indigenous groups in the development and operation of
properties including the Josemaria Project; unanticipated variation
in geological structures, metal grades or recovery rates;
fluctuations in currency exchange rates; unexpected cost increases
in estimated capital and operating costs; the need to obtain
permits and government approvals; uncertainty related to title to
the Company's mineral properties, anticipated use of proceeds from
financings, the ability of the Company to satisfy the conditions of
the terms and conditions of the debentures issued pursuant credit
facilities, including repayment thereof upon their respective
maturity dates and the issuance of Common Shares thereunder and
other risks and uncertainties disclosed in the Company's periodic
filings with Canadian securities regulators and in other Company
reports and documents filed with applicable securities regulatory
authorities from time to time, including the Company's Annual
Information Form available under the Company's profile at
www.sedar.com. In addition, these statements involve assumptions
made with regards to the Company's ability to develop the Josemaria
Project and to achieve the results outlined in the Feasibility
Study; the ability to raise the capital required to fund
construction and development of the Josemaria Project; and the
results and impact of future exploration at the Josemaria Project.
The Company's forward-looking information reflects the beliefs,
opinions, and projections on the date the statements are made. The
Company assumes no obligation to update the forward-looking
information or beliefs, opinions, projections, or other factors,
should they change, except as required by law.
Qualified Persons and Technical Report
The technical
information in this press release has been reviewed and approved by
Mr. Bob Carmichael, P. Eng. (BC), the Company's Vice President
of Exploration, and Mr. Dustin Smiley, P. Eng. (BC), the
Company's Engineering Manager. Both Mr. Carmichael and Mr. Smiley are Qualified Persons under National
Instrument 43-101 Standards of Disclosure for Mineral Projects.
Table 1 - The mineral reserve statement for the Josemaria
Project, San Juan Province, Argentina, 28 September
2020
Category
|
Tonnage
|
Grade
|
Contained
Metal
|
(Mt)
|
Cu (%)
|
Au (g/t)
|
Ag (g/t)
|
Cu lbs
(Millions)
|
Au oz
(Millions)
|
Ag oz
(Millions)
|
Proven
|
197
|
0.43
|
0.34
|
1.33
|
1,844
|
2.14
|
8.43
|
Probable
|
815
|
0.27
|
0.19
|
0.85
|
4,861
|
4.87
|
22.29
|
Total Proven and
Probable
|
1,012
|
0.30
|
0.22
|
0.94
|
6,705
|
7.02
|
30.72
|
Notes to accompany
Josemaria Mineral Reserve statement:
|
1.
|
Mineral reserves have
an effective date of 28 September 2020. The Qualified Person for
the estimate is Mr. Robert McCarthy, P.Eng.
|
2.
|
The mineral reserves
were estimated using the Canadian Institute of Mining, Metallurgy
and Petroleum (CIM), Definition Standards for Mineral Resources and
Reserves, as prepared by the CIM Standing Committee on Reserve
Definitions and adopted by CIM Council.
|
3.
|
The mineral reserves
were based on a pit design which in turn aligned with an ultimate
pit shell selected from a WhittleTM pit optimization
exercise. Key inputs for that process are:
- Metal prices of $3.00/lb Cu, $1,500/oz Au;
$18.00/oz Ag
- Variable Mining cost by bench and material
type. Average costs are $1.351/t, $1.36/t and $1.65/t for ore, NAG
waste and PAG waste, respectively.
- Processing costs vary by metallurgical zone,
ranging from $3.77/t tonalite ore milled to $3.71/t supergene.
- Infrastructure On and Off-site $0.43/t
milled
- Indirect Costs $0.46/t miled
- Sustaining capital costs of $0.54/t
- Pit overall slope angles varying from 33° to
45°
- Process recoveries for Cu and Au are based on
grade. The average recovery is estimated to be 85% for Cu and 63%
for Au. Ag recovery is fixed at 72%.
|
4.
|
Mining dilution is
accounted for by averaging grades in adjacent blocks across a
thickness of 2.5 m into each block (5.0 m per block
contact).
|
5.
|
The mineral reserve
has an economic cut-off for prime mill feed, based on NSR, of
$5.22/t, $5.21/t, $5.18/t and $5.16/t milled for tonalite,
rhyolite, porphyry and supergene material respectively and an
additional $0.53/t for stockpiled ore.
|
6.
|
There are 991 Mt of
waste in the ultimate pit. The strip ratio is 0.98
(waste:ore).
|
7.
|
All figures are
rounded to reflect the relative accuracy of the estimate. Totals
may not sum due to rounding as required by reporting
guidelines.
|
SOURCE Josemaria Resources Inc.