Ero Copper, a Canadian copper producer, has reached an earn-in deal with Vale Base Metals’ Salobo Metais to acquire a 60% stake in its Furnas copper project in Brazil.
As per the agreement, Ero Copper will earn the stake after completing several exploration, engineering and development milestones over five years from the date of the agreement.
In exchange for the 60% interest, Ero will provide sole funding for the phased exploration and engineering work programme. It will include a grant of up to 11% for VBM for a free carry on future project construction expenses.
Located 50km from VBM’s Salobo operations and 190km from Ero’s Tucumã project, Furnas is an iron oxide copper-gold project covering around 2,400 hectares of land.
Ero will mainly focus its efforts on the exploration and development of two discrete high-grade zones within the mineralised body, known as the SE and NW zones.
These zones extend over a combined strike length of 5km. Ero’s work programme will initially include infill drilling and continue with extensional drilling.
It also plans to validate the historical exploration database and develop block models to include planned infill and extensional drilling to prepare a mineral resource estimate.
The exploration programme will be conducted by Ero in three phases.
In the first phase, a minimum of 28,000m of exploration drilling is expected to take place to produce a scoping study within 18 months of a definitive agreement.
The second phase will include an additional 17,000m of exploration drilling to produce a pre-feasibility study within 18 months of completing the first phase.
In the third phase, Ero plans to conduct another 45,000m of exploration drilling to produce a definitive feasibility study (DFS) within 24 months of completing the second phase.
After the DFS is completed, subject to technical review and Ero’s approval, the parties will enter a joint venture agreement, where the company will receive a 60% interest in the project.
Ero CEO David Strang said: “We are delighted for the opportunity to partner with VBM to advance the Furnas copper project. We are fully committed to unlocking value for all stakeholders by accelerating what we believe is a world-class project.
“This partnership will leverage VBM and Ero’s collective strengths, as well as our shared vision for sustainable mine development.”
“As construction of our Tucumã project approaches completion in the coming year, we look forward to Furnas further contributing to the growth of copper production within the broader Carajás region and solidifying Brazil’s position as a leader in low carbon-intensity production of critical minerals.”