Denarius buys piece of one of the largest undeveloped copper deposits

A Canadian junior miner with a processing plant under construction in Colombia has agreed to spend C$28.8 million buying a piece of one of the largest undeveloped copper deposits in the Americas.

Denarius Metals will take 15.6% of Copper Giant Resources, anchoring a C$31 million private placement announced Thursday, Copper Giant said. On the same day, Copper Giant granted the commodities trading house Trafigura long-term offtake rights over a fifth of the future output from its Mocoa copper-molybdenum project in Putumayo, in southern Colombia.

Frank Giustra, already the company’s principal shareholder at about 13.5%, is adding to that position and will hold roughly 15.8% on a partially diluted basis once the deal closes. Ian Harris, Copper Giant’s president and chief executive, is also subscribing. All three have agreed to two-year lock-ups.

Giustra said that the appeal was both the partner and the politics. “Great long-term partner,” he said. “And with the new pro-mining President who considers this project vital to Colombia’s interest, we can advance the Mocoa deposit very quickly.”

The reference to timing is not incidental. Colombia swears in President Abelardo De La Espriella, replacing an administration that had banned new hydrocarbon exploration contracts and clashed with multinational coal producers. Copper Giant’s investor presentation quotes the president-elect saying it is “time to restore investor confidence” and that Colombia “must return to exploring and developing our strategic resources such as copper, silver and gold.”

Juan Camilo Nariño, head of the Colombian Mining Association, has said between $3.6 billion and $4 billion of mining investment could materialise over the next four years across five gold, copper, coal and nickel projects that have completed exploration or obtained licenses but never moved into construction.