Panoro Minerals Ltd. [PML-TSXV, Lima; PZM-FSE] said Wednesday October 4 that it has executed a joint venture agreement with Japan Oil, Gas Metals National Corp. (JOGMEC) on its Humamantana property in Peru. Under the agreement, JOGMEC will have the option to earn up to a 60% interest with an investment of US$8 million.
“Panoro is pleased to complete this agreement with JOGMEC whereby the company has financed another of its attractive early stage projects,” said Panoro President and CEO Luquman Shaheen.
Earlier in 2018, the company earned a 2% NSR royalty on its Kusiorcco Project by securing an investment commitment by HudBay Minerals Inc. [HBM-TSX].
“These two early stage projects complement the company’s two advanced projects; Cotabambas and Antilla, highlighting Panoro’s unique pipeline of Peru-focused copper exploration and development projects,” Shaheen said.
“We look forward to continuing to identify creative financing alternatives to move our significant pipeline of projects through exploration, engineering, permitting and into development,” he said.
Panoro rose 3.51% or $0.01 to 29.5 cents Wednesday on volume of 2.74 million. The 52-week range is 12.5 cents and 47.5 cents.
The Humamantana property covers an area of 3,600 metres and is located in Southern Peru, in a region that also hosts the Antilla and Cotabambas projects. Humamantana is situated approximately 10 km southwest of HudBay’s Constancia copper mine and the Kusiorcco Project, which was sold to HudBay by Panoro in return for cash and a 2% NSR.
Under the agreement, JOGMEC will contribute US$1 million annually for the first three years to earn a 49% stake in Humamantana. It can increase that interest to 60% by contributing another US$5 million. If either party’s interest falls below 10%, that interest will be converted to a 2% NSR royalty interest. The other party will have the option to purchase one half of the royalty for US$2 million.
Panoro and JOGMEC area planning an exploration drill program to test the continuity of a mineralized copper-gold-molybdenum porphyry that outcrops on the north part of the property.
Panoro has said it is uniquely positioned because it has been able to advance its projects through the recent downturn in the exploration sector.
Believing that the world has entered into an era where a lack of new projects is going to constrain the supply of copper, Panoro is hoping to bring Cotabambas and Antilla into production within the next few years.
A preliminary economic assessment (PEA) announced in April 2015, indicated that Cotabambas could produce 143.4 million pounds of copper on an annual basis as well as 88,000 ounces of gold, plus 967,000 ounces of silver.
The PEA envisaged an open pit mining and flotation processing at a design throughput of 80,000 tonnes per day over a 19-year lifespan. The initial project cost was estimated to be US$1.38 billion.
Panoro recently launched a review of the Antilla Project. It said internal studies completed in 2017 have indicated that the Antilla Project may have stronger economics at a smaller scale with a mine plan focused on the high grade, near surface mineralization processed with a heap leach SX/EW process.
The Antilla projects host an indicated resource of 188.5 million tonnes at 0.40% copper, and 0.009% molybdenum at a 0.2% copper equivalent cut-off. On top of that is an inferred resource of 145.9 million tonnes of 0.28% copper and 0.009% molybdenum at a 0.2% copper equivalent cut-off.
Antilla is expected to be in production sooner that Cotabambas, mostly because the latter project has more exploration upside.