Ecora inks $50M streaming deal for Zambian copper mine

Critical minerals royalty company Ecora Resources (LSE, TSX: ECOR) said on Thursday it has signed a $50 million streaming deal on Moxico Resources’ flagship Mimbula copper mine in Zambia.

The all-cash agreement will cover the entire 11-year life of mine at Mimbula based on its existing reserves, with the potential for extension.

“The acquisition will cement copper at the core of our commodity exposure and be immediately accretive to earnings and free cash flow,” stated Marc Bishop Lafleche, CEO of Ecora, in a news release. The group holds over 20 royalty and streaming assets providing exposure to critical minerals including copper, cobalt and nickel.

High-margin operation

The Mimbula project — located in the Zambian Copperbelt Province, about 10 km southeast of the town of Chingola — achieved first production in late 2022.

Currently in Phase 1, Mimbula produces copper cathodes at 99.999% consistency using a heap leach and solvent extraction/electrowinning (SX/EW) process, with a capacity of 10,000 tonnes per annum (tpa). A Phase 2 brownfield expansion is underway to increase the production capacity to 56,000 tpa.

“Mimbula has everything we look for in an investment; it is a high-quality ore body, with low operating
costs, and with an exceptional management team who have developed the project from concept to a high-margin operation currently undergoing a brownfield expansion to increase production capacity,” Lafleche said.

The first part of Phase 2 was completed and commissioned in early 2024, doubling the cathode capacity to 20,000 tpa. This resulted in total cathode production of 14,000 tonnes last year at operating costs in the lowest half of global copper mines.

Moxico, which holds 93% of the project, anticipates that final stages of the expansion will be completed by early next year, reaching full capacity by mid-2026.

A Phase 3 is also being contemplated for Mimbula, involving the construction of a processing plant to extract cobalt. The project currently has a resource of 38.6 million tonnes grading 0.037% cobalt.

Growing copper portfolio

Lafleche said acquiring the Mimbula copper stream would enhance Ecora’s strong organic copper growth profile across the short, medium and long term.

“Following the transaction, Ecora’s copper and base metal exposure as a percentage of NAV will be approximately 45% and 75% respectively, with approximately 80% of the royalties and streams in Ecora’s wider portfolio over mines and projects within the lower half of their respective cost curves,” he said.

Other copper assets under Ecora’s portfolio include the Mantos Blancos in Chile and the Carlota mine in Arizona, held by Poland’s KGHM.

To fund the deal, Ecora will use a combination of cash-on-hand and debt, including $30 million from its revolving credit facility.

“The transaction has been structured with the objective of frontloading streamed copper entitlements to the initial 7-8 years of the stream, driving earnings growth during the period as well as contributing to the group’s expected debt reduction during the next 12-24 months,” said Lafleche.