Australian iron ore major Fortescue Metals Group (ASX: FMG) has invested $1.38 million (US$984,000) in Candente Copper (TSX: DNT), increasing its stake in the Canadian junior from 9.7% to 19.92%.
Through wholly owned subsidiary Nascent Exploration, Fortescue has subscribed for 27.5 million shares at 5 ? apiece in Candente, which owns a series of copper assets in Peru. Those include Ca??ariaco Norte, a large open-pit project in the western side of the Peruvian Andes.
The world's fourth-largest iron ore producer will allocate two engineers to work on a part-time joint technical committee with Candente's staff, with a goal to identify the optimum strategy for the development of Canariaco.
Fortescue was previously granted and retains the right to appoint one person as a director of Candente Copper, as well as certain preemptive rights. These rights include anti-dilution rights and a right-of-first refusal on any debt financing or royalty or stream agreements on any of Candente Copper's assets.
The Ca??ariaco project has 7.5 billion lb. measured and inferred resources and 1.4 billion lb. inferred resources at a 0.3% copper cutoff. The project also has 1.97 million oz. gold and 54 million oz. silver.
The mine is expected to produce 262 million lb. copper, 39,000 oz. gold and 911,000 oz. silver annually, over an initial 22-year life.
At press time in Toronto, Candente was trading at 7 ?, up 8% on the day and 30% over the last 12 months. Candente's shares have more than doubled in value so far this year.
Beyond iron ore
In the past two years, Fortescue has been looking to broaden its portfolio beyond iron ore. The miner has largely focused on early-stage copper-gold deposits both in Australia and South America.
Last year, it secured a farm-in and joint-venture agreement with Tasman Resources over the Vulcan iron oxide-copper-gold-uranium (IOCGU) prospect, 30 km north of BHP's (NYSE: BHP; LSE: BHP) Olympic Dam mine in South Australia.
Fortescue entered the Argentinean market in 2018 with the acquisition of an exploration company. It is also exploring the Santa Ana concession in Ecuador since April 2019, and has recently completed its first 3,500-metre drill program in the search for copper.
- This article first appeared in our sister publication, MINING.com.