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QC Copper and Gold (TSXV: QCCU) is expanding its asset base in Eastern Canada with the acquisition of Cuprum Corp. and its Thierry copper project in Quebec. This move, says QC, would establish the company as one of Canada’s largest copper resource developers.
The acquisition would give the company two multi-billion-pound copper deposits across Ontario and Quebec.
As outlined in a binding agreement Tuesday, QC Copper will issue 1.1538 common shares for each Cuprum share acquired, resulting in the company issuing a total of 82.76 million common shares for the acquisition. The offer is based on QC’s closing share price of C$0.13 on Monday, which would value the deal at approximately C$10.76 million.
By 1 p.m. ET Tuesday, the stock had gone up to C$0.14 apiece, giving QC Copper a market capitalization of C$23.5 million. It traded between C$0.11 and C$0.18 over the past 52 weeks.
After closing the deal, QC said it plans to rebrand and change its name to XXIX Metal Corp. with a new TSXV ticker symbol XXIX to signal a new era for the company.
Both QC Copper and Cuprum are currently part of the Orecap Invest (TSXV: OCI) portfolio. Upon completion, Orecap’s ownership of QC would increase to 15.2%. It previously held 37.9% of Cuprum and 2.9% of QC.
The acquisition of Cuprum and its Thierry project, says QC, would potentially increase the company’s current copper resource base by 70%. The Thierry copper property spans 79 square kilometres and hosts a former mine that produced 5.8 million tonnes grading 1.13% copper and 0.14% nickel between 1976-1982.
Thierry currently has two resource-stage deposits: Thierry underground, also known as K2, and the K1 open pit. A preliminary economic assessment previously estimated an after-tax net present value (at 6% discount) of C$287 million, an internal rate of return of 25% and a payback period of 3.1 years for the underground deposit alone.
The K2 deposit has a measured and indicated resource of 8.8 million tonnes grading 1.66% copper and 0.19% nickel, plus an inferred resource of 14.9 million tonnes at 1.64% copper and 0.16% nickel. The K1 open pit has only an inferred resource of 53.6 million tonnes grading 0.38% copper and 0.10% nickel.
According to QC, the Thierry project represents another brownfield asset similar in scale and growth potential to its Opemiska project in Chapais-Chibougamau, Quebec, which has a total resource of 97.4 million tonnes grading 0.81% copper in the measured and indicated category and 10.9 million tonnes at 0.53% copper inferred.
“This transaction is a natural extension of QC Copper’s vision to become a leader in copper development,” Cuprum CEO Stephen Stewart said in statement.
“Both Thierry and Opemiska are in mining-friendly areas with access to critical infrastructure such as all-season roads, power and rail,” he noted, adding that both mines historically sent copper concentrates to the Horne smelter, the only copper smelter in Canada.
“These geographic advantages reduce capital expenditure and operational risks while optimizing supply chain efficiency-crucial as the global copper market faces constraints,” Stewart said.
Post acquisition, QC says the next step is to expand the resource at Thierry, in particular at the K1 zone, through a large-scale drill program, while also advancing the Opemiska project towards a PEA.
