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Thursday, 30 May 2013
Marifil Mines inks joint venture for copper property in Argentina with Southern Copper
Marifil Mines (CVE:MFM) has inked a joint venture deal under which Southern Copper Argentina, a subsidiary of Southern Copper Corp (NYSE:SCCO), will acquire a 70 per cent stake in the company's Cerro Samenta porphyry copper project in Salta Province, Argentina, giving Marifil some extra cash on hand.
According to the terms of the deal outlined in a statement Wednesday, the Southern Copper subsidiary must pay Marifil a total of US$375,000 over four years, including $75,000 on signing the agreement, in exchange for the 70 per cent holding.
Southern Copper also has to carry out a minimum $4 million work program on the property over the same time frame, and will make the contract payments on behalf of Marifil to two underlying property owners over a six year period.
After satisfying these terms, the copper company can also increase its equity stake from 70 per cent to 80 per cent by providing Marifil with a bankable feasibility study within seven years from the date of signing the deal.
“We welcome Southern Copper as a partner to help us develop this porphyry copper property," said Marifil president John Hite, in a statement accompanying the announcement.
"The past two years have been particularly difficult for the junior market with the stock prices of almost half of all TSX-V listed companies being under 10 cents per share.
“This agreement also removes the financial burden of the underlying property payments and advances our business model by having other companies finance exploration on our properties.”
Hite also said he is excited to work with Southern Copper, a major producer that brings production experience to the project.
"Argentina has received some bad press suggesting that it is a poor place to invest. We disagree with this assessment and point out that not only is SC planning to explore and develop projects in Argentina but other major companies such as Chevron, Agrium, Barrick, and Xstrata are also spending billions of dollars on new projects," he added.
The Cerro Samenta property has a high grade copper oxide target at surface, and boasts infrastructure including paved roads, rail road, and a nearby water source. So far, the company has completed a number of high grade copper samples from trenches, and outlined a 7 square kilometre IP anomaly.
Shares of Marifil surged by one penny to hit four cents on the TSX Venture Exchange on Wednesday.