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World Copper signs definitive deal to acquire Zonia project in Arizona

View to the southwestern end of the Zonia pit. Credit: Cardero Resource Corp.

World Copper (TSXV: WCU) announced on Monday that the company has entered a definitive agreement to acquire Cardero Resource Corp. and its advanced-stage Zonia copper-oxide project in central Arizona.

In April, World Copper signed a letter agreement to acquire Cardero in an all-stock deal, which would give Cardero shareholders 40% ownership of the then-issued and outstanding WCU Shares, with the remaining 60% to be held by existing WCU shareholders.

An amended agreement in June also granted Robert Kopple, a controlling shareholder of Cardero, an option to acquire a 1% net smelter returns royalty on the Zonia project. The royalty option may be exercised by paying World Copper an amount equal to approximately C$1.41 million ($1.1m).

Zonia is a near-surface, copper-oxide resource and a brownfields site mined in the late 1960s and 70s

The Zonia property is located in the Walnut Grove mining district of Arizona, comprising 261 mineral claims plus surface rights acquired from the state, all totaling about 4,280 acres.

Zonia is a near-surface, copper-oxide resource and a brownfields site, having already been mined in the late 1960s and 70s. The project has had over 50,000 metres of drilling to date, with substantial amounts of detailed engineering completed.

Based on past drilling covering 30% of the property, the Zonia copper resource is estimated at 15.6 million measured tonnes grading 0.43% Cu (129.3 mlb copper), 61.4 million indicated tonnes grading 0.31% Cu (380.6 mlb copper) and 27.2 million inferred tonnes grading 0.28% Cu (154.6 mlb copper).

A 2018 PEA on the copper-oxide deposit outlined a mine plan and development strategy entirely on private land, which could significantly reduce the timeline for permitting. Based on a copper price of $3.00/lb, the study showed an after-tax NPV of C$225 million ($175m) and an IRR of 29%.

“The signing of the definitive agreement with Cardero is another milestone for World Copper and one that will bring significant value to our shareholders. Our team sees upside potential at Zonia that has, to this point been unrealized, including a low-cost development and permitting path,” Nolan Peterson, World Copper’s CEO said in a news release.

“We will apply the same knowledge and expertise to Zonia, as we have to our Escalones property, and work to advance and de-risk the project going forward,” Peterson added.

Shares of World Copper fell 2.3% by noon EDT, giving the company a market value of C$18.5 million ($14.4m). Cardero’s stock, too, fell 7.1% to a C$9.2 million ($7.1m) market capitalization.

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