Denarius Metals acquires 50% interest of Rio Narcea Recursos

Serafino Iacono, Executive Chairman and CEO of Denarius Metals, commented, “The acquisition of a 50% stake in RNR reflects the continued execution of our strategy of acquiring significant projects in highly prospective and tier one mining jurisdictions in Spain. The acquisition gives us ownership in the only nickel deposit in Spain and one of the few in Europe. With our Zancudo Project in Colombia already on track to commence production in 2024, this acquisition gives us a second mine going into operation next year as Aguablanca is set to resume production through underground mining in the next 12 months. The acquisition also accelerates our path to production from our flagship Lomero Project using excess capacity available in RNR’s 5000 tpd processing plant. Our technical expertise and location of assets in the nearby Autonomous Community of Andalucia makes us uniquely suited to benefit from the synergies derived from a combination of the Lomero and Aguablanca Projects. We look forward to continuing our work to help the Autonomous Communities of Andalusia and Extremadura become frontrunners in sustainable raw material technologies and practices to support the European climate neutrality goal and increase local well-being.”

Under the Agreement, Alto Minerals S.L.U., a wholly-owned subsidiary of Denarius Metals in Spain, and owner of the company’s Lomero Project, has acquired 50% of all of the issued and outstanding shares of RNR in an arm’s length transaction with the RNR Shareholder Group for cash consideration totalling €25 million, of which €2.5 million has been paid on signing of the Agreement and the balance will be paid in instalments of €5 million on 13 March 2024 and approximately €5.8 million at the end of each of June, September, and December 2024. The company used a portion of the net proceeds from its recently completed convertible debenture financing to fund the initial payment and is currently in discussion with several parties regarding potential structured financing sources, including royalties, streaming, prepayments on offtake contracts, and other similar arrangements, to fund the future payments due in 2024. No finder’s fees are being paid in connection with the acquisition.

In addition, the company, through Alto, and the RNR Shareholder Group have entered into a joint venture agreement pursuant to which Alto will appoint three members of the RNR board of directors and the RNR Shareholder Group will appoint the remaining three members. Pursuant to the JV Agreement, Alto will be the operator of the Aguablanca Project and the RNR Shareholder Group will provide a line of credit to RNR to fund the resumption and start-up of operations at the Aguablanca Project.

The acquisition of the 50% stake in RNR is subject to conditional approval of the TSX Venture Exchange.

Read the article online at: https://www.globalminingreview.com/mining/08122023/denarius-metals-acquires-50-interest-of-rio-narcea-recursos/