News

2013.07.05

Republic of Peru: Participation in Zafranal Copper Project

Mitsubishi Materials Corporation (MMC, President: Hiroshi Yao, capital: 119.4 Billion yen) is pleased to announce that AQM Copper Inc. (AQM) and its wholly-owned subsidiary Minera AQM Copper Peru S.A.C. (AQM Peru) agreed to and signed on a Subscription Agreement which stipulates MMC's purchase of a 40% stake in AQM Peru. The signing took place on June 28 (local time) in the City of Vancouver, British Columbia, Canada.

AQM Peru is a Peruvian subsidiary wholly owned by AQM in order to participate in the Zafranal copper project (Project).
AQM Peru is executing this project through Compañia Minera Zafranal (CMZ), which is a joint venture between AQM Peru and the Canadian natural resources company Teck Resources Limited (Teck). AQM Peru and Teck have a 50:50 interest in the project.
MMC will acquire 40% stake of AQM Peru, meaning an indirect interest of 20% of the Project, in exchange for investing 22.6 million USD by undertaking newly issued shares of AQM Peru in accordance with the Subscription Agreement.
Furthermore, after the undertaking of newly issued shares described above, AQM Peru will issue more new shares of which MMC will contribute 15.1 million USD representing MMC's proportionate share.
MMC's funding will be able to cover the costs related to the Pre-Feasibility Study and Feasibility Study.

This Project is located in the porphyry copper belt of Southern Peru, an area where other major copper projects are also located. The Project is expected to be cost competitive by taking advantage of developed infrastructure in the surroundings, it's favorable waste ore ratio (1.06) and favorable location, such as its modest elevation (approx. 2900 meters) and accessibility to the coast (approx. 80 kilometers).

Participation in this Project is in line with MMC's strategy to proactively secure stable supply of copper concentrates and acquisition of quality assets in their earlier stages of development. The involvement in the Project will serve to increase the MMC's own source of concentrate supply and diversifying its supply portfolio.

<Related Information>

  1. Overview of AQM Copper Inc.
    (1) Headquarters
    Vancouver, British Columbia, Canada
    (2) President
    Mr. Bruce Turner
  2. Overview of Zafranal Copper Project*
    (* Based on Preliminary Economic Assessment data disclosed on Jan. 16, 2013)
    (1) Property holder
    Compañia Minera Zafranal S.A.C.
    (Joint Venture between AQM Peru 50% and Teck Resources 50%)
    (2) Location
    90km northwest of Arequipa, Peru. Elevation: 2,900m.
    (3) Total in-pit mineral resources
    512 million tonnes (Cu 0.36%, Au 0.07g/t)
       (Breakdown)
    Flotation 425 million tonnes (Cu 0.38%)
    Leaching 87 million tonnes (Cu 0.23%)
    (4) Mining method
    Open pit
    (5) Mine life
    Approx. 15 years (13 years for leaching)
    (6) Milling rate
    80,000 tonnes/day
    (7) Metal production
     
    LOM Total Concentrate Cu 1.41 million tonnes, Au 15 tonnes
    Cathode Cu 120 thousand tonnes
    Annual Average Concentrate Cu 94 thousand tonnes, Au 1 tonne
    Cathode Cu 9 thousand tonnes
    (8) Capex
    1,520 million USD
    (9) Position
    See map below

    Position

    [Capital Relationship Diagrams]Before Investment by MMCBefore Investment by MMC

    After Investment by MMCAfter Investment by MMC

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