Canadian copper producer Ero Copper has signed an earn-out agreement with Vale Base Metals’ Salobo Metais to acquire a 60% interest in its Furnas copper project in Brazil.
Under the agreement, Ero Copper will acquire the interest upon the achievement of a number of exploration, technology and development milestones within five years from the date of the agreement.
In return for a 60% interest, Ero will provide exclusive funding for a phased program of exploration and engineering work. These include providing VBM with a subsidy of up to 11% to cover future project construction costs at no charge.
Furnas is an approximately 2,400-hectare iron oxide-copper-gold project located 50 kilometers from VBM’s Salobo operations and 190 kilometers from the Eros Tucumã project.
Ero will primarily focus on the exploration and development of two separate high-grade zones within the mineralization body, the SE and NW zones.
The total strike length of these areas is 5 km. Ero’s work program includes initial infill drilling and subsequent expansion drilling.
There are also plans to validate historical exploration databases and develop block models to incorporate planned infill and extension drilling to prepare mineral resource estimates.
Ero’s exploration program will be conducted in three phases.
The first phase is expected to involve at least 28,000 meters of exploratory drilling to complete scoping studies within 18 months of final agreement.
Phase 2 will include an additional 17,000 meters of exploratory drilling to enable completion of the pre-feasibility study within 18 months of completion of Phase 1.
During Phase 3, Ero plans to conduct an additional 45,000 meters of exploratory drilling within 24 months of completion of Phase 2 to develop a Definitive Feasibility Study (DFS).
After the completion of DFS, the two parties will sign a joint venture agreement, and subject to Ero technical review and approval, the company will obtain 60% of the project.
David Strang, CEO of Ero, said: “We are delighted to have the opportunity to work with VBM to advance the Furnas copper project. We are fully committed to creating value for everyone involved by advancing what we believe to be a best-in-class project.
“This partnership will leverage the shared strengths of VBM and Ero and our shared vision for sustainable mine development.”
“As construction of our Tucumã project nears completion next year, we look forward to Furnas continuing to contribute to the growth of copper production in the wider Carajás region and cementing Brazil’s position as a leader in the production of critical low carbon intensity minerals.”
