New World Resources has penned an $11 million royalty agreement with UK-listed Trident Royalties over its Antler copper project in the US. Pic via Getty Images
Mining
Special Report: New World Resources has moved a step closer to the development of its Antler copper project in the US, landing $11 million in royalty financing.
Under a binding agreement with UK-listed Trident Royalties, New World Resources (ASX: NWC) will receive $11 million for a 0.9% NSR royalty on future metal production from Antler, about 15km east of Yucca in north-western Arizona.
The agreement includes a further 0.45% NSR royalty over any additional mineral rights NWC acquires within 5km of the current extents of the project.
NWC also retains the rights to buy back 0.3% of the main project area royalty for $9 million and 0.15% of the additional mineral rights royalty for $4 million at any time within three months of obtaining at least 75% of the development funding for Antler.
The $11 million of royalty funding is slated to accelerate the expansion of the resource at Antler, which contains 11.4Mt at 2.1% copper, 5% zinc, 0.9% lead, 32.9g/t silver and 0.36g/t gold.
That includes the new phase of exploration drilling which began last month.
NWC managing director Mike Haynes said the Trident agreement was “considerably less dilutive” for shareholders than alternative equity funding options.
“Trident has undertaken extensive due diligence on the project, so this represents another strong endorsement of NWC’s expansion and development strategy to become a significant North American copper producer,” he said.
“The company is now well financed to continue to advance the Antler copper project towards initial production, which is targeted to coincide with a period when a substantial shortfall in global copper supply is forecast.”
Trident has shown foresight when it comes to picking commodity trends. Its most significant agreement to date is a royalty over the Thacker Pass lithium project in Nevada.
This was secured in May 2021, almost two years before the General Motors-backed project was fully permitted and financed.
The AIM-listed group claims the likes of Amati, Blackrock, LIM, Regal and Ruffer among its major shareholders.
Under the agreement with NWC, Trident has the right to match any royalty or streaming transaction associated with the Antler project up until 12 months post declaration of commercial production.
The agreement is also exclusive to Antler and does not impose a royalty on other projects in NWC’s portfolio, including Javelin and Tererro.
It is the second significant source of funding for NWC in recent months following a $5 million equity investment from Resources Capital Funds (RCF).
NWC published a scoping study on Antler earlier this year which supported mining 15.4Mt via an underground operation at 1.3-1.5Mtpa for an initial 13 years. Production of 381,400t of copper-equivalent metal in concentrate is expected to generate US$3 billion of revenue and US$1.5 billion of free cash flow over the operating period.
Pre-production capex is estimated at US$252 million. Other key financials include C1 costs of US$1.68/lb on a copper equivalent basis, NPV of US$835 million and IRR of 40.2%.
In conjunction with the new phase of exploration drilling that is now under way, PFS work is also well advanced and on schedule for completion towards the end of this calendar year.
This article was developed in collaboration with New World Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
