COPPERMOLY will pay more to acquire stakes in three Papua New Guinean exploration licences after a variation of its deal with Barrick PNG Exploration.
Coppermoly subsidiary Copper Quest agreed to buy back the Barrick-owned stakes in the EL 1043, El 1445 and EL 1077 permits, also known as the Nakru, Simuku and Telelumas licences, in June 2013.
Barrick had earned a 72 per cent stake in the New Britain project areas in 2012 through a farm-in agreement which had cost the company A$20 million.
The initial re-acquisition was to see Coppermoly reacquire Barrick’s interest in the West New Britain project exploration licences for a total of A$5 million, payable in three stages with a final payment of A$3 million.
But a variation in the terms of the agreement will now see Coppermoly pay A$4.5 million as its final repayment – taking the total amount paid to A$6.5 million.
The variation, announced in October, was “as a concession to Barrick for allowing this extension,” Coppermoly said.
The first stage was the initial payment of A$680,000 – which, when completed in October 2013, gave Coppermoly a 51% stake in the licences.
The second stage of the acquisition was to see Coppermoly pay A$1.33 million to Barrick to acquire an additional 21% interest in the blocks from Barrick – initially payable by August 2014.
But in its latest variation to the deal, Coppermoly secured an extension to the payment date to 9 January 2015, the company having earlier secured a reduction in the payment to A$1.31 million.
The payment can be satisfied through the issue of Coppermoly shares, according to the new agreement, subject to Coppermoly meeting the conditions precedent to the deal.
The agreement is conditional on Coppermoly raising at least A$1.2 million through the issue of equity securities and repaying an unsecured loan of it had received in July 2014 from major shareholder Jelsh Holding.
The term of the bridging loan from Jelsh was also extended until 9 January 2015, in a move that Coppermoly said would not earn it any additional fees or penalties.
Coppermoly director Ben Faulkner said the company appreciated what he described as Barrick’s and Jelsh’s “appreciation for the current state of the market.”
“Obtaining Barrick’s agreement to extend the date for satisfying the conditions precedent to the Variation and satisfaction of the second payment due to Barrick is significant given the difficulties for junior exploration companies raising capital in the current market,” he said.
The company was still considering alternative opportunities to raise additional funds to meet its obligations and remain fully funded for future exploration and operational requirements, it said.