Vancouver —
A syndicate of investment dealers agreed to buy 27.4 million units of Northern Orion at $3.65 apiece. The deal includes an option to buy up to 6.8 million additional units at the same price. A unit consists of one share and half a share purchase warrant. (The company also has $55 million in cash on hand.)
Agua Rica is within 35 km of the Baja de la Alumbrera copper-gold mine, in which Northern Orion has a 12.5% interest.
The company plans to mine the deposit by open-pit methods, either independently or in conjunction with Alumbrera (that is, by sharing facilities).
An updated feasibility study for Agua Rica is expected in the fourth quarter. Developing Agua Rica for production would take another 4-5 years.
In 2000, Agua Rica was found to contain a resource of 750 million tonnes grading 0.62% copper and 0.04% molybdenum, plus 0.23 gram gold and 3.2 gram silver per tonne, based on a cutoff of 0.4% copper.
Northern Orion, together with then-partner BHP, discovered Agua Rica in the mid-1990s, and a positive feasibility study was tabled in 1997. The study called for daily mining of 60,000 tonnes at a capital cost of US$767 million, or alternatively, 120 tonnes at US$1.1 billion.
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