Copper, zinc and silver miner Canadian Copper has secured up to C$96-million in committed project financing from OR Royalties, which is a global top-five precious metal streaming company, and Ocean Partners UK. 

The company will use the capital to develop its 100%-owned Murray Brook project and Caribou process plant, together called the Bathurst Complex, in New Brunswick.

The project financing represents a significant derisking milestone as the company aims to become a near-term critical mineral producer in Bathurst.

Canadian Copper confirms it will receive C$12.3-million of the financing already at the end of April, with financing being structured as a combination of streaming, project debt and equity.

About 50% of the capital is discretionary, which provides the company with flexibility as it advances development of the Bathurst Complex.

OR Royalties' share of the funding comprises $38-million in exchange for a 20% life-of-mine payable silver and gold stream from the Bathurst Complex.

In turn, Ocean Partners, which is an existing 17% shareholder in Canadian Copper, will provide up to $48-million in project debt in exchange for 100% of the Bathurst Complex offtake rights.

OR Royalties and Ocean Partners have also committed to invest in common share equity subscriptions in Canadian Copper for an amount up to $10.5-million.

Canadian Copper CEO Simon Quick comments junior near-term producers have the primary goals of securing project financing, securing all necessary permits for construction and executing a project to plan. "Today's project financing funds the preliminary economic assessment capital expenditure requirements but also allows our growing development team to focus on securing remaining permit approvals and to deliver one of Canada’s few near-term critical mineral operations."

He adds that this flexible financing structure protects Canadian Copper's current long-term shareholders from excessive common share equity dilution and helps to maintain a strong shareholder registry for future development.

The financing serves to provide the company with sufficient working capital to complete required Bathurst Complex work streams, including awarding all material project tenders for April, staffing the execution team, project engineering, permitting, and, where possible, compressing the development schedule to first production.

This financial capacity also enables the company to acquire nearby deposits to further increase the Bathurst Complex mine life, if they become available, and create financial capacity for the company’s near-term development capital requirements, while maintaining optionality with other capital providers. This is illustrated by 55% of the total project financing being optional at the company’s discretion.

Meanwhile, OR Royalties' streaming agreement comprises gold and silver deliveries for which OR Royalties will pay a purchase price equal to 20% of the spot price for silver and gold, respectively.

Additionally, OR Royalties has already indicated it will enter into a C$5.4-million equity subscription for Canadian Copper common shares immediately upon the closing of the OR Stream, consisting of 7.3-million common shares at a price of $0.75 apiece. 

Construction funding installments will be contingent upon typical industry-standard conditions, including completing customary milestones such as obtaining all remaining required permits for the Bathurst Complex development, board approval for construction, material agreements for execution, full funding to completion available at the time of each installment and a comprehensive financial model to support a minimum debt service coverage ratio.

Pursuant to the terms of the concentrate pre-payment facility, Ocean Partners has also committed to two possible additional capital injections, including by exercising 12.7-million warrants currently held with an exercise price of $0.25 apiece, and, at Canadian Copper’s election, subscribing to an additional C$5-million in equity if required by Canadian Copper at a future date.

Canadian Copper has provided OR Royalties and Ocean Partners with corporate guarantees and security collectively ranked pari passu over the company’s assets related to the Bathurst Complex.