VANCOUVER, British Columbia, Jan. 08, 2018 (GLOBE NEWSWIRE) -- Panoro Minerals Ltd. (TSXV:PML) (Lima:PML) (Frankfurt:PZM) ("Panoro", the "Company") is pleased to announce that its wholly-owned subsidiary, Panoro Apurimac S.A., has transferred a 100% interest in the 12 mining concessions that comprise the Kusiorcco project in southern Peru to a wholly owned subsidiary of Hudbay Minerals Inc. (“Hudbay”). The Kusiorcco project is located near Hudbay’s Constancia mine.
In consideration for the transfer of the mining concessions, Panoro has received an upfront cash payment of US$3 million from Hudbay and will receive additional payments totalling US$2 million upon the completion of certain milestones by Hudbay. Hudbay has also granted Panoro a 2% net smelter returns (“NSR”) royalty on mineral production from the Kusiorcco project.
In connection with the acquisition, Hudbay has agreed to exercise, on or before January 31, 2018, 2,060,484 common share purchase warrants of Panoro which are held by Hudbay and exercisable at a price of C$0.27 per share, for aggregate proceeds of C$556,330. These warrants otherwise would have been exercisable until August 26, 2018.
Panoro will use the US$3 million upfront payment and proceeds from the exercise of the warrants for exploration activities on its Cotabambas project.
“We are grateful for Hudbay’s continued strong relationship with, and support for, Panoro. They are a premier mine building team with a track record of successful community relations and mine development in Peru,” commented Luquman Shaheen, CEO and President of Panoro. “This transaction successfully monetizes a non-core asset for Panoro, and will allow Panoro to deploy the proceeds to further advance our core Cotabambas project, while retaining upside in Kusiorcco through the royalty. The proceeds from the transfer of concessions plus early exercise of warrants will be directed to exploration and step out drilling at both Cluster 1 and Cluster 2 at the Cotabambas project. The 2017 exploration work at Cotabambas has identified growth potential at both the Maria Jose and Petra-David Targets in Cluster 1. The Chaupec skarn target in Cluster 2 presents yet another intriguing target. The proceeds from this transaction together with scheduled payments from Wheaton Precious Metals are expected to provide funding for Panoro’s exploration activities through to the end of 2019.”
Milestone payments by Hudbay to Panoro will be made as follows:
- US$500,000 upon the execution of agreements with local communities and surface titleholders necessary for Hudbay to access and carry out a drill program on the project
- US$500,000 upon completion of Hudbay’s first drill hole on the project;
- US$500,000 upon completion of Hudbay’s fifth drill hole on the project; and
- US$500,000 upon completion of Hudbay’s tenth drill hole on the project.
If all of the above milestones are not achieved within five years of the acquisition, Hudbay will either pay Panoro the remaining milestone payments or return the Kusiorcco mining concessions to Panoro, free and clear of all encumbrances.
Hudbay has the option to buyback half of the NSR royalty (reducing the royalty to a 1% NSR) for US$2 million within five years of the acquisition and for US$5 million thereafter.
The Kusiorcco project consists of strong, coincident 1-km by 2-km induced polarization and resistivity anomalies overlying a 300m by 500m alteration zone characterized by an intensive stockwork of quartz veins with the weathered out voids filled by iron oxides after sulphides.
About Panoro
Panoro Minerals is a uniquely positioned Peru focused copper exploration and development company. The Company is advancing its flagship project, Cotabambas Copper-Gold-Silver Project and its Antilla Copper-Molybdenum Projects located in the strategically important area of southern Peru. The Company is well financed to expand, enhance and advance its projects in the region where infrastructure such as railway, roads, ports, water supply, power generation and transmission are readily available and expanding quickly. The region boasts the recent investment of over $US 15 billion into the construction or expansion of four large open pit copper mines.
