Copper Royalty

Project: Pukaqaqa

Location Peru
Operator Nexa Resources
Commodity Copper, Molybdenum
Mine Type Open pit
Stage Advanced 

Pukaqaqa Resources (NI 43-101)*

Measured  107.3Mt @ 0.43% Cu – 459kt
contained copper
Indicated  201.7Mt @ 0.39% Cu – 796kt
contained copper
Inferred 40.1Mt @ 0.34% Cu – 137kt
contained copper
Source: Nexa Resources
* Pukaqaqa Resources (See announcement dated 18 December 2020 for resource breakdown)

Trident has acquired a portfolio of three existing royalties over the Pukaqaqa Copper Project, a development stage copper asset located in the Huancavelica region in Peru. The Pukaqaqa Project comprises 34 concessions covering 11,125.8ha and containing NI 43-101 compliant Measured and indicated Resources of 309 million tonnes at 0.41% Cu (approximately 1.26 million tonnes of contained copper), with an additional Inferred Resource of 40.1 million tonnes at 0.34% Cu for 136,340 tonnes contained copper.

The project is being advanced by NYSE- and TSX-listed Nexa Resources, an established South America-focused mid-tier producer with five operating base metals mines (plus an additional mine under construction) and three operating smelters in Peru and Brazil. The most recent technical report contemplates an open-pit mining operation to feed a 30,000 tonne-per-day processing plant to produce copper and molybdenum concentrates over an initial 19-year mine life. Nexa has allocated a total of US$16 million towards advancing the project over the last three years.

The three royalties over Pukaqaqa comprise:

  1. Vaaldiam Royalty: A sliding scale NSR royalty of 1.00% (if the quarterly average reference copper price is US$3.00/lb or less), and 2.00% (if the quarterly average reference copper price is greater than US$3.00/lb). In addition, there are a total of US$8 million in milestone payments delivered early in the mine life, with US$4 million upon commencement of commercial production and an additional US$4 million upon the second year of commercial production;

  2. Pukaqaqa Norte Royalty: A 1.00% NSR royalty covering concessions in which the bulk of the contemplated open pit will be located; and

  3. Pukaqaqa Sur Royalty: A 0.50%-1.00% NSR royalty (depending on the specific concession) covering concessions with promising exploration potential in the south-eastern area of Pukaqaqa, which can be repurchased at any time for US$350,000.

The Pukaqaqa Project   

The Pukaqaqa Project contemplates the development of a copper, molybdenum, and gold deposit utilising open-pit mining to produce both a copper concentrate and a molybdenum concentrate via a 30,000 tonne-per-day onsite processing facility over a 19-year mine life.

Trident believes there exists significant potential to expand and upgrade the sizeable mineral resource inventory through drilling along strike and down-dip, as well as with additional infill drilling. Additionally, there are up to seven named exploration targets situated within a 6km radius from the existing deposit, adding potential mine life to the operation. There is also potential for the skarn deposit to overlay large scale copper porphyry mineralisation. Based on the current resource and at a processing rate of 30,000 tonnes-per-day, Trident believes that Pukaqaqa has the potential to produce around 35,000 tonnes of copper per year, along with potential molybdenum, gold, and silver credits.