Ero Copper (TSX: ERO, NYSE: ERO) has closed a deal with Salobo Metais, part of Vale’s (NYSE: Vale) base metals subsidiary, to advance the Furnas project in the Carajás mineral province of Brazil’s Pará state.
Furnas is an iron oxide-copper-gold project located about 50 km southeast of Vale Base Metals’ Salobo operations and 190 km northeast of Ero Copper’s Tucumã project, which is scheduled for production later this year.
The agreement contemplates Ero Copper earning a 60% interest in the project upon completion of exploration, engineering and development milestones over a period of five years from the execution of a definitive earn-in agreement.
Ero will solely fund a phased exploration and engineering work program during the earn-in period and grant Vale Base Metals up to an 11% free carry on future project construction capital expenditures.
The Vancouver-based miner will also cover the exploration and engineering work leading to a definitive feasibility study at the end of the five-year earn-in period.
Covering an area of about 24 sq. km., the project sits within 15 km of extensive regional infrastructure, including paved roads, an industrial-scale cement plant, a power substation and Vale’s railroad loadout facility.
Shares of Ero Copper fell 1.15% by 11:55 a.m. EDT on Monday. The miner has a market capitalization of C$2.72 billion ($1.98 bn).
