Latin Metals has entered into a letter of intent with Minsur covering a potential transaction for the Lacsha Copper Project in Peru that could generate up to $42.62 million in cash for Latin Metals while leaving the company with a 1% net smelter returns royalty. The companies plan to work toward definitive agreements within 90 days.
Under the proposed structure, Minsur can earn an initial 75% interest in Lacsha over six years by completing at least 60,000 meters of drilling and making $2.62 million in aggregate cash payments to Latin Metals.
Minsur would fully fund the drilling program.
After earning the 75% interest, Minsur would have a 180-day window to acquire the remaining 25% for another $20 million.
If exercised, Latin Metals’ ownership would convert into a 2% net smelter returns royalty.
For three years following that buyout, Minsur would also have the right to repurchase half of the royalty for another $20 million.
If all stages are completed, Latin Metals would receive as much as $42.62 million in cash while retaining a 1% NSR royalty on future production.
If Minsur does not acquire the remaining 25%, the parties would establish a joint venture owned 75% by Minsur and 25% by Latin Metals’ Zafiro subsidiary, with subsequent costs funded proportionally.
Latin Metals could elect to convert its joint venture stake into a 2% NSR royalty.
Latin Metals acquired Lacsha through staking and spent less than C$1 million advancing the project through early exploration and drill permitting before reaching the agreement with Minsur.
The project is located approximately 130 kilometers north of Lima and benefits from road access, nearby power infrastructure and proximity to ports.
Lacsha sits within Peru’s emerging Cretaceous Copper Belt and contains geological characteristics associated with porphyry copper systems, including copper-molybdenum geochemistry, alteration and geophysical anomalies.
Minsur has more than 45 years of operating experience and owns mining and processing assets including the San Rafael tin operation, Pucamarca gold mine, Pisco tin smelter and refinery, and a controlling stake in the Mina Justa copper mine.
KEY QUOTES:
“Through this transaction, Latin Metals may ultimately transform an internally generated exploration project into US$42.6 million in cash while retaining a 1% NSR royalty on future production. The transaction demonstrates the capital efficiency of Latin Metals’ prospect generator model.”
“Lacsha has evolved into one of the most compelling copper opportunities within our portfolio, combining strong copper-molybdenum geochemistry, compelling geophysical targets, established community agreements and drill permits.”
“Minsur is a multi-billion-dollar mining company, one of Peru’s most respected miners, and an excellent partner for Lacsha.”
Keith Henderson, CEO Of Latin Metals
