(Alliance News) - Taseko Mines Ltd on Tuesday said that its latest royalty agreement will support construction activities at the Florence copper project, which it claims could be a "major" supplier for the US copper cathode market.
In November, the the North America-focused mining company agreed the terms of the royalty agreement with Taurus Mining Royalty Fund LP relating to the project based in Arizona's "copper corridor".
On Monday, the two companies signed a definitive agreement for the sale of a USD50 million royalty for revenue from the Florence project. The royalty will grant Taurus 1.95% of gross revenue from all copper sales from Florence.
Taseko said that site preparations and civil work are already "well advanced", and has initial plans install four rigs at Florence.
Proceeds are expected to be received in early February, and the company expects to drawdown USD10 million of the USD50 million financing agreed with Mitsui & Co Ltd in November by the end of January. Taseko said that Mitsui's financing will "accelerate" construction activities at the Florence.
A total of around USD175 million has been obtained by Taseko for the project to date, including a USD50 million secured debt facility provided by Societe Generale SA, which has been granted credit approval.
Chief Executive Officer Stuart McDonald said: "Signing of the Taurus royalty agreement is another positive milestone for the project. We are excited to be ramping up construction activities at Florence Copper, which will soon be a major new supplier of low-carbon copper cathode to the US market.
"As an existing copper producer, Taseko is in an enviable and unique position with near-term, low cost production growth coming from a fully-permitted and environmentally beneficial copper project. With copper now added to the US Department of Energy's critical materials list, market interest in our project and future copper production remains strong."
Shares in Taseko were untraded on Wednesday morning, last quoted at 106.21 pence each in London on Tuesday.
By Hugh Cameron, Alliance News reporter
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Taseko Mines L. (TKO)