Feb 14 2014
Anfield Resources Inc. is pleased to announce that it has signed a Purchase Agreement, subject to due diligence, with Blue Zen Memorial Parks to jointly advance Anfield's Binghampton Copper Queen (BCQ) copper project in Arizona.
The initial stage of the Agreement includes a $2 million project-level investment by BZM - to be used to delineate an NI43-101-compliant copper resource estimate at BCQ - with an Operative Date no later than May 15th, 2014. Subject to the results of the NI 43-101 copper-equivalent resource estimate, Anfield will sell up to 50% of the BCQ project to BZM. Anfield has also agreed to provide BZM with a right of first refusal with regard to the BCQ project's production off-take agreement, whereby BZM would purchase 100% of mine production over the life of the mine.
The company of BZM's principal shareholder, TDL, consists of 20 operational entities which generate over $1.8 billion in sales on an annual basis. Moreover, it has land reserves of 9.3 million square metres and holds interests in mineral exploration and development assets worldwide. Even more importantly, TDL has begun to implement a vertical integration strategy in order to secure long-term copper resource supply and distribution channels. To this end, TDL is both currently building the Lianyungang Copper Processing Project, an 800,000-ton copper smelting facility in Jiangsu Province, China and pursuing the acquisition of copper mining assets across the globe.
"We are extremely pleased to sign this Agreement with BZM in order to advance the BCQ copper project," stated Corey Dias, CEO of Anfield. "As a reminder, BCQ is located in the Arizona volcanogenic massive sulphide (VMS) Belt of central Arizona, where a number of large, multiple-grade copper deposits have previously been discovered and placed into production. The largest of the mines in the VMS Belt - United Verde - produced approximately 2.5 billion pounds of copper at an average grade of 4.36% before closing down in the 1960s.
In BZM we believe we have found a partner who has a significant incentive to see the BCQ project advance to the production stage - reflected in its desire to secure the production off-take agreement at an early stage - namely, its need to maximize capacity utilization at its copper smelter. Moreover, Anfield's success in negotiating a production off-take agreement places it in a unique position vis-a-vis many of its junior resource peers, as such an agreement - which can be used as collateral to secure debt lending for project capex, a crucial component of the building of a mine - materially increases the likelihood that a project would reach the production stage".
Under the terms of the Agreement, Anfield will sell up to 50% of the BCQ project, subject to the results of the NI43-101 resource estimate; the initial $2 million investment will either represent: 1) 20% of the BCQ project, if the resource estimate is equal to, or greater than, 2 billion pounds of copper-equivalent; or 2) 50% of the BCQ project, if the resource estimate is less than 2 billion pounds of copper-equivalent. If the resource estimate is greater than 2 billion pounds, BZM will have the option to acquire an additional 30% interest in the BCQ project - in addition to its initial 20% ownership stake - at a purchase price of $1 million per 10% increment.
Subject to certain milestones, this Agreement also provides a comprehensive framework for the: 1) joint funding, and preparation of, a Preliminary Economic Assessment; 2) joint funding, and preparation of, a Feasibility Study; and 3) joint funding, and construction of, the mine and subsequent copper production. The Agreement also gives BZM the right of first refusal with regard to the BCQ production off-take agreement, providing BZM with an option to purchase 100% of mine production over the life of the mine, priced at a 10% discount to the LME copper spot price.
Source: http://www.anfieldresources.com/