Kutcho Copper Buys Back Royalty and Terminates Sumitomo Offtake ROFR
06 July 2021 - 9:00PM
Kutcho Copper Corp. (TSXV: KC, OTCQX: KCCFF)
(“Kutcho Copper” or the “Company”) is pleased to announce it has
agreed to buy back the royalty held by Sumac Mines (now Sumitomo
Metal Mining Canada) (the “Sumac Royalty”) and terminate Sumac’s
Right of First Refusal to purchase concentrates (the “Sumac ROFR”)
from the Kutcho copper-zinc project, both of which rights were
granted under an Acquisition Agreement between Sumac Mines Ltd. and
Western Keltic Mines Inc. dated August 29, 2003.
The total purchase price of the Sumac Royalty
buyback and Sumac ROFR termination is USD $3.2 million to be paid
as follows:
- An initial payment of USD
$1,000,000 (paid)
- A second payment of USD $500,000 on
or before October 5, 2021; and
- A final payment of USD $1,700,000
on or before December 31, 2021.
The Sumac Royalty encompasses most of the Main
deposit and all of the Sumac deposit at Kutcho commencing three
years after commercial production is declared, and comprises a 2%
net smelter return (“NSR”) until the 6th anniversary of production
after which the royalty would increase to a 3% NSR. The Sumac ROFR
allows Sumitomo to take concentrates produced from the areas
covered by the Sumac Royalty in kind.
Kutcho Copper President and CEO, Vince Sorace,
commented: “We view the buyback as a highly accretive transaction
to the Company which will provide an economic benefit to the Kutcho
project that will be reflected in the upcoming feasibility study.
In addition, termination of the Sumac ROFR gives the Company full
flexibility to engage freely in strategic discussions with respect
to offtake and offtake financing arrangements. This will provide a
more competitive environment for concentrate offtake terms given
that offtake for 100% of the concentrate is now available for
negotiation.”
RCI Capital Group acted as financial adviser in
connection with this transaction.
About Kutcho Copper Corp.
Kutcho Copper Corp. is a Canadian resource
development company focused on expanding and developing the Kutcho
high grade copper-zinc project in northern British Columbia.
Committed to social responsibility and the highest environmental
standards, the Company is progressing the Kutcho Project through
feasibility and permitting with the objective of getting to a
positive construction decision.
Vince SoracePresident & CEO, Kutcho Copper Corp.
For further information regarding Kutcho Copper
Corp, please email info@kutcho.ca or visit our website at
www.kutcho.ca.
Cautionary Note Regarding Forward-Looking
StatementsNeither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
This news release contains certain statements
that may be deemed “forward-looking statements” with respect to the
Company within the meaning of applicable securities laws.
Forward-looking statements are statements that are not historical
facts and are generally, but not always, identified by the words
“plans”, “believes”, “intends”, “estimates”, “potential”, and
similar expressions, or that events or conditions “will”, “would”,
“may”, “could” or “should” occur. Although Kutcho Copper believes
the expectations expressed in such forward-looking statements are
based on reasonable assumptions, such statements are not guarantees
of future performance, are subject to risks and uncertainties, and
actual results or realities may differ materially from those in the
forward-looking statements. Such material risks and uncertainties
include, but are not limited to, the Company’s ability to raise
sufficient capital to fund its obligations under its property
agreements including the payments for the Sumac Royalty buyback and
termination of the Sumac ROFR going forward, to maintain its
mineral tenures and concessions in good standing, to explore and
develop the Kutcho project or its other projects, to repay its debt
and for general working capital purposes; changes in economic
conditions or financial markets; the inherent hazards associates
with mineral exploration and mining operations, future prices of
copper and other metals, changes in general economic conditions,
accuracy of mineral resource and reserve estimates, the potential
for new discoveries, the potential to convert inferred resources to
indicated or measured resources, the potential to optimize the mine
plan, the ability of the Company to obtain the necessary permits
and consents required to explore, drill and develop the Kutcho
project and if obtained, to obtain such permits and consents in a
timely fashion relative to the Company’s plans and business
objectives for the project; the general ability of the Company to
monetize its mineral resources; and changes in environmental and
other laws or regulations that could have an impact on the
Company’s operations, compliance with environmental laws and
regulations, aboriginal title claims and rights to consultation and
accommodation, dependence on key management personnel and general
competition in the mining industry. Forward-looking statements are
based on the reasonable beliefs, estimates and opinions of the
Company’s management on the date the statements are made. Except as
required by law, the Company undertakes no obligation to update
these forward-looking statements in the event that management’s
beliefs, estimates or opinions, or other factors, should
change.
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