Fortescue Metals Group has diversified its asset portfolio further into copper by investing $C1.38 million ($1.5 million) in Candente Copper, which owns a large-scale open pit project in Peru.
Through subsidiary company Nascent Exploration, Fortescue has subscribed for 27.5 million Candente shares at $C0.05 apiece, increasing its stake to 19.92 per cent from 9.72 per cent.
Candente Copper is focussed on the Canariaco project, which includes the feasibility-stage Canariaco Norte deposit, Canariaco Sur deposit and Quebrada Verde prospect, located within the western Cordillera of the Peruvian Andes.
Fortescue will allocate two engineers to work on a joint technical committee with Candente’s staff to identify the optimum strategy for the development of Canariaco.
It also retains the right to appoint a director of Candente Copper, and holds pre-emptive rights, including anti-dilution rights and a right-of-first-refusal on any debt financing, royalty or stream agreements on any of Candente’s assets.
Candente Copper chief executive Joanne Freeze said the company was pleased to have a “recognised global leader in the mining industry” as a strategic investor.
“Considering Fortescue’s cornerstone values including safety, protection of the environment and contributing to opportunities for local communities by working together, we believe they are a great fit to support Candente Copper and the Camariaco project,” Freeze said.
In the past two years, Fortescue has been looking to broaden its portfolio beyond iron ore. The miner has largely focused on early-stage copper-gold deposits both in Australia and South America.
Last year, it secured a farm-in and joint venture agreement with Tasman Resources over the Vulcan iron oxide-copper-gold-uranium (IOCGU) prospect, around 30 kilometres north of BHP’s Olympic Dam mine in South Australia.
Fortescue entered the Argentinean market in 2018 with the acquisition of an exploration company.
It is also actively exploring the Santa Ana concession in Ecuador since April 2019 and has recently completed its first 3,500 metre drilling program in the search for copper.