Business
Norsemont Mining Announces Exercise of Rio Tinto Initial Option
Interest in Constancia Copper Project set to Increase to 81% Shares Issued and Outstanding: 37,91...
About this update from Norsemont Mining Inc.
[{"type":"text","content":"\n\n\n\nInterest in Constancia Copper Project set to Increase to 81%\n\n\nShares Issued and Outstanding: 37,912,878\n\n\nTSX: NOM\n\n\nBVL: NOM\n\n\nVANCOUVER and LIMA, Peru, Nov. 29 /CNW/ - Norsemont Mining Inc. (TSX:\nNOM, BVL: NOM) ("Norsemont", the "Company") today announced that the Company\nhas exercised its exclusive option to aquire an initial 51% of the Constancia\ncopper project from Rio Tinto. Combined with the 30% interest that the Company\nrecently acquired from Mitsui Mining and Smelting, this acquisition brings\nNorsemont's interest in the Constancia Project to 81%. The Constancia Project\nis located in southern Peru.\n\n\nIn order to exercise the initial option, granted in 2005, Norsemont was\nobligated to completed work expenditures at Constancia of US$7.8 million, make\nUS$5 million of payments and issue 1,250,000 common shares (or their cash\nequivalent) to Rio Tinto. All three obligations have been met.\n\n\nUnder the terms of the same Rio Tinto option agreement, Rio Tinto has 60\ndays within which to decide whether to claw back a 17% undivided interest in\nConstancia. This can only be done if, in the reasonable opinion of Rio Tinto,\nConstancia's global resource estimate is not less than four million tonnes\n(8.8 billion pounds) of contained copper. In the event that Rio Tinto claws\nback a 17% interest, they will have to pay Norsemont three hundred percent\n(300%) of the Company's net cash payments, work expenditures and share\nissuances related to the project. If Rio Tinto does not exercise its claw back\nwithin 60 days, Norsemont may acquire the remaining 19% interest for US$8\nmillion, which would bring the Company's interest in Constancia to 100%.\n\n\nCommenting, Norsemont's President and COO Bob Baxter said: "This\nrepresents a key milestone in Norsemont's development. The recently completed\nConstancia scoping study demonstrates that the project is very robust and has\nthe potential to produce up to 90,000 tonnes of copper per annum at cash\noperating costs of less than $0.75 per pound. The study also confirmed that,\nusing a long-term price of US$1.80 per pound of copper, Constancia's net\npresent value is in excess of $400M and the IRR is in excess of 21 percent.\nThe exercise of the Rio Tinto initial option places Norsemont in a control\nposition over Constancia and is an ...