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Anglo Pacific Group to acquire a net smelter return royalty in Peruvian copper project

Published: 00:37 09 Jun 2018 AEST

Copper wire
Anglo says there is an "attractive copper demand outlook"

Anglo Pacific Group plc (LON:APF, TSX:APY) is to acquire an existing 0.5% net smelter return royalty over the Cañariaco copper project from Entrée Resources.

The Cañariaco project in Peru is wholly-owned by Candente Copper (TSE:DNT).

READ: Anglo Pacific continues to generate lots of cash from its mining royalty portfolio​

Anglo Pacific will provide Entrée with US$1mln in Anglo Pacific shares in return for the royalty.

The acquisition is in line with the company's strategy to invest smaller amounts in development stage opportunities that have the potential for higher returns along with significant growth potential.

"The Cañariaco Royalty reflects the company's increased focus on commodities which we believe will be vital in the delivery of new technology and innovation. This copper royalty supplements our Maracás Menchen vanadium royalty and our recently announced Piauí nickel-cobalt royalty, providing the company with considerable exposure, and upside, to base materials which have a huge part to play in the energy storage and electric vehicle revolution,” said Julian Treger, the chief executive officer of Anglo Pacific Group.

"It is predicted that in the coming years declining copper grades at existing operations and the lack of recent investment into copper production capacity will lead to a supply deficit based on industrial demand sources alone. The incremental copper demand, driven by electric vehicle sales growth forecasts, creates conditions for an even tighter supply environment,” Treger said.

"We believe new copper supply will be required, and with a NI 43-101 compliant measured and indicated resources of over 7.5 billion pounds of contained copper, the Cañariaco project ranks as one of the largest independently owned, undeveloped copper projects. The project's additional exploration upside, low-cost potential and location in an established mining jurisdiction indicates a positive prospect for development during the next decade,” he continued.

"Longer-term, the Cañariaco project has the potential to provide economic benefits in the form of direct, full time, life of mine employment for approximately 600 people, as well as 2,000 people during construction, and in addition the potential to create indirect life of mine indirect employment for an additional 2,400 people over a 20 year mine-life," Treger suggested.

Shares in Anglo Pacific were up 2% at 153p towards the end of trading.

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