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Fortescue ups stake in Candente Copper with $2.9m investment

Candente aims to turn Cañariaco Norte into an open pit copper-gold mine. (Image courtesy of Candente Copper.)

Australian miner Fortescue Metals Group (ASX: FMG) is investing a further C$4 million ($2.9m) in Candente Copper (TSX: DNT), which will increase its stake in the Canadian junior from 19.4% to 25.4%.

The world’s fourth-largest iron ore producer will buy 22.2 million shares of Candente at C$0.18 per share, a 26% premium to the five-day volume-weighted average price of the junior’s shares.

Fortescue had previously acquired a strategic interest in the copper firm in May 2020 through the purchase of 27.5 million shares. 

The company already has two seats on Candente’s board, filled by FMG general manager of metals Latin America, Christine Nicolau, and the head of corporate development, Jeremy Meynert.

Candente executive chairperson Giulio Bonifacio about C$3 million from the placement proceeds will be used for further development of the company’s advanced Cañariaco copper project in Peru.

The remainder will be used to repay a C$1 million loan (about $736,000) advanced by FMG in September.

The Cañariaco asset includes the Cañariaco Norte copper deposit, the Cañariaco Sur copper-gold deposit and Quebrada Verde prospect, in northern Peru.

A preliminary economic assessment for the property, released earlier this year, outlined a $1.04 billion project to produce an average 173 million pounds of copper, 31,395 ounces of gold and 703,588 ounces of silver a year at net direct cash costs of $1.28 per pound for 28 years.