ZMR.V - great news out. Stock is grossly undervalued imho
Headline: Zaruma Resources and Glencore International AG enter into Memorandum of Understanding on Financing of Luz del Cobre Copper Project
Symbol: ZMR
TORONTO, June 23 /CNW/ - Zaruma Resources Inc. (TSX-ZMR) is pleased to report that the Company has entered into a Memorandum of Understanding ("MOU") with Glencore International AG ("Glencore") regarding the financing of the Luz del Cobre copper project located on Zaruma's wholly-owned San Antonio property in Sonora, Mexico.
The MOU is conditional on there being no change in management of Zaruma, and on the management slate of directors being elected at the Annual General Meeting of Shareholders of Zaruma on June 29, 2006.
Under the terms of the MOU, Glencore will fund the capital cost required to bring Luz del Cobre into production. Repayment of the debt plus interest based on the London Interbank Offer Rate will be from cash flow generated by the production and sale of copper from Luz del Cobre project. Glencore shall have the right to acquire all of the copper production from Luz del Cobre based on London Metal Exchange market prices.
A definitive financing agreement will be finalized after completion of the formal updated feasibility study on the project, which is expected by September 30, 2006.
Northern Securities Inc., Toronto, initiated the financing arrangement and is acting as financial advisor to Zaruma.
The Company is currently working on the feasibility study and has contracted consulting engineers M3 Engineering & Technology Corp, of Tucson, Arizona and Hermosillo, Mexico, experts in this type of project, to review the existing flow sheet, costing and construction blueprints for the electrowinning copper recovery plant, with the aim of fast-tracking any required additions or revisions. Earlier this week, Zaruma filed the Environmental Impact Manifest, (Manifesto Impacto Ambiental) with the Mexican authorities, for approval of the development of the project.
Thomas Utter, President and CEO of Zaruma commented, "since Glencore staff visited Luz del Cobre in April this year, we have made significant progress on the project, and we are very pleased to welcome Glencore to the project under mutually favourable conditions. This is a further very important step in moving to production." |
