Augusta Resource Corp. (TSX:AZC) became the latest western Canadian company to sign a major investment agreement with resource-hungry South Korea.
The Vancouver-based company said Thursday that the deal is worth US$176 million, and allows a Korean consortium to earn a 20% joint venture interest in the Rosemont copper-molybdenum project in Pima County, Arizona. The consortium includes state-owned Korea Resources Corp. and industrial trader LG International Corp.
The deal comes on the heels of a June investment that Korea Resources and LG made in Vancouver’s Lithium One Inc. (TSX-V:LI) to develop its Sal de Vida lithium project in Argentina.
That deal followed news in March that Korea Gas Corp., South Korea’s state-owned natural gas company, plans to invest $1.1 billion over the next five years to develop natural gas projects in northeast B.C. (See “Major international players eye B.C. gas riches” – issue 1063; March 9-15).
For Augusta, the deal means the company has secured approximately 50% of the US$900 million it needs to build Rosemont, which is expected to be the third largest copper mine in the U.S. if built.
“We are well advanced in discussions with project finance lenders for the balance of the funding,” said Augusta president and CEO Gil Clausen. “The steps taken today have substantially de-risked the project and will enable timely project construction upon receipt of final permits.”
In February, Augusta signed a US$230 million deal with another Vancouver-based company, Silver Wheaton Corp. (TSX:SLW), that will also help fund Rosemont.
Augusta spokesperson Meghan Brown told BIV the company still has environmental permitting hurdles to clear before the project can be built, but construction could begin in 2012.
At press time, the company’s shares were up 12.89% to $3.59 on midday trades.