Located 33km North East of the city of Antofagasta, Planta Prat comprises a small SXEW agitation leach plant built in 2009 to treat old leach residues derived from a precipitation plant that operated in the nearby Mantos Blancos mine several decades ago. The Prat plant failed to operate efficiently due to build-up of iron sulphate and closed after a few months of operation. Based on positive initial agitation leach test work carried out by our consultants, ProTech SA, Coro believes that this issue can be readily resolved and intends to complete further test work to confirm this during its 120 day due diligence period, which will also include backhoe sampling of the residues.
The agreed purchase terms (August 2014) for Coro to own a 65% interest are as follows;
- $10,000 payment on signature of LOI (paid)
- $40,000 payment on February 6, 2015
- $100,000 payment on formation of Newco (51% Coro) on completion of expansion of the Prat plant to 1,200tpy Cu capacity by August 6, 2017 at Coro's cost
- Additional 14% interest in Newco earned by Coro upon Commencement of Commercial Production (80% of 1,200tpy Cu annual production rate for 60 consecutive days)
- First right of refusal over Constanza's interest
Constanza owns some of the leach residues and intends to gain access to the rest. Coro and Constanza have also identified additional deposits in the area which can be potentially treated by Planta Prat and intend to acquire them.
Subject to the results of due diligence sampling and metallurgical test work, we anticipate putting Prat back into production quickly and cheaply; to provide a new source of cash flow to the Company at a low acquisition cost and, we believe, with an excellent rate of return. Coro also views the acquisition of an interest in Planta Prat as a first step in the establishment of a larger district wide business.