Newport gains Mantua option in Cuba

Newport Exploration (NWX-V) has an option to gain a half-interest in the Mantua copper project in Cuba from Northern Orion Explorations (NNO-T).

To acquire its stake, Newport would take over Northern Orion’s subsidiary, Minera Mantua. This would entail covering up to US$20,000 worth of Northern Orion’s monthly operating costs in Cuba, and completing up to US$750,000 worth of sampling during the first year of the deal

The agreement also includes two financing schemes.

If Northern Orion comes up with satisfactory financing for commercial production, Newport would issue Orion 1.4 million shares and assume US$20 million of the US$28 million subordinated debt owing to Northern Orion by Geominera, a Cuba state-owned company that owns the remaining half of the project.

Should Newport secure its own financing, it would take on just US$14 million of the subordinated debt. All costs incurred to secure the financing in either case will be charged to Minera Mantua.

Newport’s stake would also include a 2.5% royalty owing to Miramar Mining (MAE-T).

In the end, Northern Orion would also be entitled to appoint one director to Newport’s board.

Newport already issued Orion 400,000 shares on entering the option deal.

A 1999 in-house prefeasibility study by Northern Orion pegged Mantua’s overall resources at 11.9 million tonnes running 2% copper, based on more than 300 holes. The most recent independent study confirmed an open-pit resource totalling 7.5 million tonnes of 3.03% copper, with a stripping ratio of 7.1-to-1. These figures are based on a cutoff grade of 1% copper.

Previous metallurgical pilot plant tests indicate annual production of 17,700 tonnes of copper cathode at direct operating costs of US$970 per tonne (US44 per lb.) over an 11-year mine life. Capital costs are pegged at US$48.5 million.

Situated 4 km from tidewater, Mantua has a gold recovery plant, paved highways, mine-site office buildings, and mining equipment.

Across the globe, Newport dropped its option earlier this summer to acquire an 80% interest in two mineral licences in southern Mongolia, from Bell Coast Capital (BCP-V). Newport cited delays in obtaining translation and confirmation of title documents.

The two blocks, nos. 8 and 9, cover 2,500 sq. km east of Ivanhoe Mines‘ (INV-T) Turquoise Hill copper-gold project.