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(Kitco News) - Osisko Gold Royalties (TSX: OR) (NYSE: OR) announced today that it has entered into a binding agreement to acquire a 1.0% copper NSR royalty and a 3.0% gold NSR royalty from Hot Chili Limited covering Hot Chili’s Costa Fuego copper-gold project in Chile, for total cash consideration of US$15.0 million.
According to a company press release, Costa Fuego is one of the world’s largest undeveloped copper projects not currently controlled by a major mining company.
A March 2022 global mineral resource estimate (MRE), including both the open pit and underground portions of the Cortadera and Productora deposits, contains an indicated resource of 725 million tonnes grading 0.47% Cu equivalent, grading 0.38% Cu, 0.11 g/t Au, 0.45 g/t Ag and 93 ppm Mo.
The MRE also includes an inferred resource of 202 million tonnes grading 0.30% Cu and 0.06g/t Au.
Hot Chili’s June 28, 2023 preliminary economic assessment (PEA) projects a 16-year life-of-mine with an annual average production rate of 95kt Cu and 49koz Au in the first 14 years.
The project’s base-case post-tax NPV8% is US$1.10 billion (approximately, within a range of US$731 million to US$1.46 billion) and IRR is 21% (approximately, within a range of 17% to 25%). The PEA projects one of the lowest capital intensity copper development projects globally.
President and CEO Sandeep Singh commented, “Costa Fuego has the potential to be a long-life, lower-cost copper mine in Chile, with significant by-product credits, importantly situated at low elevation and in close proximity to key infrastructure.
“We are impressed with what the Hot Chili team has been able to accomplish to date, most notably on the exploration and permitting fronts, and we look forward to future development milestones at Costa Fuego.”
Osisko Gold Royalties is an intermediate precious metal royalty company which holds a North American focused portfolio of over 180 royalties, streams and precious metal offtakes. Osisko’s portfolio is anchored by its cornerstone asset, a 5% net smelter return royalty on the Canadian Malartic mine, one of Canada’s largest gold mines.
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