Ecora Resources Finalizes $50 Million Streaming Deal on Mimbula…

Ecora Resources has signed a $50 million streaming deal with Moxico Resources for the Mimbula copper mine in Zambia. This all-cash agreement spans the mine’s 11-year lifespan and aims to enhance copper exposure in Ecora’s portfolio. Currently in a production phase, the mine is set for further expansions to increase capacity significantly.

Ecora Resources, a company specializing in critical minerals royalties, has recently finalized a $50 million streaming agreement for Mimbula, the flagship copper mine operated by Moxico Resources in Zambia. This agreement, which represents an all-cash transaction, is set to span the entire 11-year lifespan of the mine, based on its current reserves, with opportunities for extension in the future.

CEO Marc Bishop Lafleche expressed that this acquisition will solidify copper’s role at the center of Ecora’s commodity portfolio while being advantageous for earnings and free cash flow. Ecora currently manages over 20 royalty and streaming assets that offer exposure to vital minerals such as copper, cobalt, and nickel.

The Mimbula mine, situated in Zambia’s Copperbelt Province, approximately 10 km southeast of Chingola, began production in late 2022. It is presently in Phase 1, generating copper cathodes with 99.999% purity through a heap leach and solvent extraction/electrowinning (SX/EW) approach, achieving an annual capacity of 10,000 tonnes.

A Phase 2 expansion project is actively in progress, aimed at increasing this capacity to 56,000 tonnes annually. Lafleche emphasized that Mimbula presents an excellent investment opportunity due to its high-quality ore, low operational costs, and competent management team guiding its successful development.

Phase 2’s initial segment has been completed and operational since early 2024, which effectively doubled cathode capacity to 20,000 tonnes per year. Notably, Mimbula achieved a total copper production of 14,000 tonnes last year at operational costs among the lowest globally for copper mines.

Moxico Resources, which holds a 93% stake in the project, expects to complete the final stages of the production expansion by early next year, with full capacity anticipated by mid-2026. Additionally, plans for a third phase are under consideration, which would introduce a processing facility to extract cobalt; the mine currently possesses a resource of 38.6 million tonnes grading 0.037% cobalt.

Lafleche indicated that this acquisition will further bolster Ecora’s robust organic growth in copper production over the coming years. Post-transaction, copper and base metal assets will comprise approximately 45% and 75% of Ecora’s net asset value, respectively, with around 80% of royalties and streams situated within lower-cost mines.

To finance this deal, Ecora will utilize both cash reserves and debt, including $30 million from a revolving credit facility. This agreement has been structured specifically to maximize copper stream entitlements in the initial 7-8 years, promoting earnings growth and aiding in anticipated debt reduction over the next 12 to 24 months.

In summary, Ecora Resources’ $50 million streaming deal for the Mimbula copper mine represents a strategic move to strengthen its position in the copper market, enhancing its growth potential and optimizing earnings. With the mine’s efficient production, low costs, and future expansion projects, Ecora is well-positioned for success. This acquisition underscores Ecora’s commitment to critical minerals and sustainable growth in the mining sector.

Original Source: www.mining.com