Engineering & Mining Journal

APR 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 15 of 83

REGIONAL NEWS - LATIN AMERICA 14 E&MJ • APRIL 2019 Luminex Joins With BHP to Advance Concessions in Ecuador Luminex Resources has entered into a non-binding letter of intent with BHP for an earn-in and joint-venture agreement on Luminex's Tarqui 1 & 2 mining conces- sions in southeast Ecuador. BHP will have the right to earn up to a 70% ownership interest in the property by investing up to $75 million in exploration expenditures and making up to $7 million in cash pay- ments to Luminex. Luminex has agreed to work exclusively with BHP to negotiate and complete a binding agreement. The letter of intent envisages a three- stage earn-in process, whereby BHP will have the right to earn a 51% interest on completion of $25 million of exploration expenditures and $2.4 million in cash payments to Luminex within the fourth anniversary of the signing of the joint-ven- ture agreement; earn an additional 9% interest on completion of cumulative $35 million of exploration expenditures and cumulative $7 million in cash pay- ments to Luminex within the sixth anni- versary of the signing of the joint-venture agreement; and earn an additional 10% interest on completion of cumulative $75 million of exploration expenditures. BHP will assume management of the joint-venture company and the exploration program and will have the right to acceler- ate the exercise of the earn-in by complet- ing all the exploration expenditures and any outstanding cash payments to Luminex in a period shorter than the earn-in term. Assuming completion of the third earn-in, Luminex will retain a 30% inter- est in the property and will be responsible for funding its 30% pro rata share of any capital required. "Luminex is ex- cited to advance Tarqui with an orga- nization like BHP, with the opportunity and commitment to supply future global copper demand and a strong focus on re- sponsible develop- ment in Ecuador," Luminex CEO Mar- shall Koval. "Tarqui is an exciting cop- per prospect that BHP and Luminex will pursue over the coming years." Luminex is a precious and base metals exploration and development company headquar- tered in Vancouver, Canada, and fo- cused on gold and copper projects in Ecuador. The com- pany holds a large and highly prospec- tive land package in Ecuador consisting of approximately 100,000 ha, includ- ing the Orquideas and Pegasus projects, which it is co-developing with First Quan- tum Minerals and Anglo American Plc, respectively. Agua Rica, Alumbrera Plan Integration Yamana Gold, Glencore International, and Goldcorp have signed an integration agreement pursuant to which Yamana's Agua Rica project will be developed and operated using the existing infrastruc- ture and facilities of the Alumbrera mine in Catamarca province, Argentina. The Alumbrera mine is owned 50% by Glen- core, 37.5% by Goldcorp, and 12.5% by Yamana. Ownership of the integrated project is planned at Yamana 56.25%, Glencore 25%, and Goldcorp 18.75%. The companies believe the integration of Agua Rica and Alumbrera has signifi- cant merit given the proximity of the as- sets and the potential to realize synergies by taking full advantage of existing Alum- brera infrastructure. The Agua Rica projects hosts a large- scale, long-life copper mineral resource, with associated gold, silver, and molybde- num, while the Alumbrera infrastructure has scale and configuration that are ideally suited for the integration plan. Preliminary studies show the potential for a mine life of more than 25 years, with production averaging approximately 236,000 metric tons per year (mt/y) of copper-equivalent metal during first 10 years of operation. Agua Rica's proven and probable min- eral reserves total about 4.5 million mt of copper and 6.5 million ounces (oz) of gold contained in approximately 910 mil- lion mt of ore. The companies have established a technical committee to direct the review and evaluation of the integrated project. They anticipate that a prefeasibility study will be completed in 2019 and that a full feasibility study with updated mineral re- serve, production, and project cost esti- mates will be completed by 2020. A geologic map for the Tarqui deposit in Ecuador shows the discovery zone. (Photo: Luminex Resources) (Continued on p. 26)

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