Ecuador-focused Adventus and Luminex to merge

Canadian junior Adventus Mining (TSX-V: ADZN) (OTCQX: ADVZF) is acquiring cohort Luminex Resources (TSX-V: LR) (OTCQX: LUMIF) in an all-stock deal that creates an Ecuador-focused copper-gold development company.

The transaction, announced as a merger, will see Adventus acquire Luminex, with Luminex shareholders receiving 0.67 of an Adventus share for each held. The combined company will continue to trade under Adventus’ name and ticker.

The new firm will lead the advancement towards production of two main projects and consolidate a large exploration portfolio in the South American country.

One of these projects is the El Domo-Curipamba copper-gold deposit, which is at feasibility stage. The other is the preliminary economic assessment (PEA) stage Condor gold project.

The El Domo – Curipamba project has been touted by Adventus as the next modern mine in Ecuador, leveraging one of highest copper-gold grades and lowest capital intensities globally.

The project, which has attracted investment from the Ecuador government, is completing its environmental consultation with a construction decision expected in the first half of 2024. 

The Condor project in southeast Ecuador is about 35 km south of the Fruta del Norte mine held by Lundin Gold (TSX: LUG). It’s also close to El Mirador copper mine, run by Ecuacorriente, which is a subsidiary of the Chinese consortium Tongling-China Rail. 

A preliminary economic assessment for Condor, completed in 2021, outlines a 12-year operation producing 187,000 ounces of gold per year.

The merged company will also have one of the largest exploration portfolios in Ecuador, made up of more than 135,000 hectares across 13 projects. 

All on board 

The business combination counts the support of geologist and mining entrepreneur Ross Beaty’s Lumina Group, local Ecuadorian investors and strategic equity investors, including Altius Minerals and Wheaton Precious Metals.

Before completion of the concurrent financing, Adventus shareholders will own 61% of the resulting company and Luminex shareholders 39%. 

Beaty is expected to be the only shareholder post-transaction to own more than 10% of the issued and outstanding shares.

“For Adventus shareholders, the new capital and acquisition of Luminex’s Condor project and other properties allows the creation of a stronger and more diversified company with one of the largest copper-gold exploration portfolios in Ecuador,” Adventus chief executive Christian Kargl-Simard said in the statement.

“This combination gives Luminex shareholders a more immediate re-rating and return potential from the advancement of the El Domo Project, Luminex CEO Marshall Koval, noted.

Alongside the transaction, the companies announced a concurrent financing for about $17.1 million, with participation by Beaty and Wheaton.

Mining was Ecuador’s fourth-largest source of income last year, behind sales of oil, bananas and shrimp, bringing $2.8 billion to the state’s coffers.

Growing opposition to extractive activities, the country’s Chamber of Mining noted, is blocking nearly $1 billion in potential investment and 100 projects for the next two years.

An exception is SolGold’s (LON: SOLG) Cascabel copper-gold project, which was granted in July a 25-year license renewal.