Titan seals pivotal US$120m Ecuador copper deal with Hancock

Titan Minerals has sealed a US$120 million (AU$180 million) deal with a subsidiary of Western Australian mining giant Hancock Prospecting, which is spending big to earn up to 80 per cent of the company’s Linderos copper play in Ecuador.

The deal with Hancock’s Hanrine Ecuadorian Exploration means that both companies can get their drill bits turning, with a major exploration program now underway. With logistics and site visits already happening, the plan is to immediately punch 10,000m of drilling into the ground, underlining management’s confidence in Linderos as a potentially world-class copper project.

To kick off the agreement, Hanrine will pay Titan US$2 million (AU$3.million) to grab a 5 per cent stake in Linderos. From there, it will either fund a 10,000m drill program or spend US$8 million (AU$12 million) within the first two years to boost its share to 30 per cent.

It can then either drop another US$12 million (AU$18 million) on exploration costs, or drill another 15,000m to claim 51 per cent. At that point, Titan will pocket an extra US$1 million (AU$1.5 million) bonus.

If the plan plays out as intended and the project hits the mining stage, Hanrine can then commit to the balance up to the full US$120 million over 12 years to lock in an 80 per cent stake, while Titan gets a free ride for the entire business journey.

For now, Titan will be carried through the earn-in period, with Hanrine funding exploration until it achieves the fourth milestone for its 80 per cent interest. Should Titan’s interest in the project dilute below 10 per cent, it will retain a 2.7 per cent net smelter royalty.

The JV & earn-in agreement represents endorsement of what we believe is an exciting early-stage porphyry copper-gold discovery. We are well advanced in our technical discussions with Hanrine, who are ready to commence exploration activities at the Linderos Copper Project, with expansion of the camp being the first task on the priority list to ensure seamless and efficient operations once drilling commences.

Leighton says a major positive for the deal is Hanrine’s well-established in-country team and the subsequent technical capability and financial capacity to aid the pursuit of exploration success in Ecuador, which would help boost the South American country’s economy.

The Linderos project – which stretches for 143 square kilometres in the Ecuadorian mountains – has already shown promise through early drilling in 2022 when eight diamond holes for 3700m revealed significant copper porphyry intercepts starting close to surface. Six of the eight holes in the program ended in mineralisation.

In one notable drillhole, Titan reported 308m at 0.4 per cent copper including a 76m section of 0.5 per cent copper equivalent from 132m, indicating the potential for a large-scale deposit. An induced-polarisation (IP) geophysical survey also identified an extensive alteration system, hinting at further mineralisation potential.

As Hanrine prepares to launch its exploration activities at Linderos, both companies are keen to capitalise on Ecuador’s growing reputation as a mineral-rich nation. Before the country’s former president Guillermo Lasso was impeached last year, international investors and miners were actively being wooed by the government to look at opportunities in Ecuador as one way of solving its economic crisis.

Since then, his successor Daniel Noboa, who at the age of 35 is the youngest president in the country’s history, appears to be talking from the same page having opened the annual Prospectors and Developers Association in Canada (PDAC) in March, to declare “a new mining era in Ecuador”.

To further emphasise the point and in a separate deal, Hanrine also signed an agreement in March with the Ecuador Government, committing to spend an additional US$120 million in exchange for being awarded 28,276 mining hectares in country.

The new partnership appears to have strengthened Titan’s credentials in Ecuador, adding to its impressive 3.1 million-ounce Dynasty gold project. By leveraging Hanrine’s in-country experience and vast resources in a bid to unlock the full potential of Linderos, the company is likely to have investors watching the upcoming exploration efforts at the site with interest.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au