Cordoba Minerals (CDB-V) Consolidating San Matias and creating value
100% ownership of the Alacran Deposit and over 200,000 hectares of a highly prospective copper-gold district will create a leading copper-gold company in the Americas
On June 13, Cordoba Minerals announced a transaction with High Power Exploration (HPX), a private mineral exploration company, which will see Cordoba become the 100% owner and sole operator of the highly prospective San Matias copper-gold project in Colombia, which hosts our flagship Alacran Deposit. Mining entrepreneur Robert Friedland is the largest indirect investor in HPX.
The transaction is highly beneficial to Cordoba’s shareholders as it will significantly simplify the ownership structure of the San Matias Project and the shareholding structure to unlock value. It also allows us to retain a significantly larger economic interest in Alacran and the rest of the highly-prospective copper-gold district, thereby positioning Cordoba to become a leading copper-gold exploration and development company in the Americas.
We see this transaction as a key strategic step to set the stage for Cordoba’s next phase of growth, providing us with the flexibility to aggressively pursue additional high-quality mineral prospects in Colombia and elsewhere, while continuing to expand our San Matias Project.
The transaction is neutral with respect to HPX’s current San Matias ownership. HPX will exchange its current approximately 69% controlling economic interest in San Matias (consisting of a 51% direct stake in San Matias and a 36% share ownership interest in Cordoba) for an approximate 67% share ownership interest in Cordoba following completion of the concurrent financing.
As part of the transaction with HPX, we announced a concurrent C$10 million bought-deal, private placement financing led by BMO Capital Markets, Sprott Private Wealth and Haywood Securities. It is estimated that if the sole focus of the joint venture was to complete a feasibility study for the Alacran Deposit, it can potentially be completed for approximately C$10 million. Under the previous joint venture structure, Cordoba shareholders would retain a 35% interest in San Matias upon HPX delivering a feasibility study. The transaction and concurrent financing will allow existing Cordoba shareholders to retain an effective 43% interest in San Matias – approximately 20% more than the ownership under the previous joint venture structure. The net proceeds of the financing will be used to fund exploration expenses at San Matias. This will include expenses incurred in connection with preparing a feasibility study for the Alacran Deposit.
Following completion of the financing and the transaction, an increased market capitalization and an improved capital markets profile are expected to further enhance Cordoba’s trading activity and liquidity.
Finding world-class mineral deposits requires perseverance, persistence and geological expertise. Together with HPX, we have several world renowned geologists who are focused on carefully selected targets in Colombia and evaluating other high-quality exploration projects in the region. HPX’s Typhoon data acquisition system is a world-leading, accurate and powerful, induced polarization and electromagnetic geophysical survey technology to rapidly evaluate underground geological targets and accelerate mineral exploration programs.
The transaction will continue to align Cordoba’s shareholders’ economic interests with those of HPX and Robert Friedland, better positioning Cordoba to leverage the leadership and experience of the HPX team to deliver meaningful, long-term value to Cordoba’s shareholders. Over a period of more than 25 years, Mr. Friedland has successfully developed a portfolio of respected public and private companies whose initiatives have led to several of the world’s most significant mineral discoveries and mine developments, including Voisey’s Bay, Oyu Tolgoi, Kamoa-Kakula and Platreef.
We thank you for your support of the transaction as we seek shareholder approval at our annual and special meeting of shareholders on July 27, 2017. Should you have any questions with respect to the transaction or our ongoing exploration activities, please do not hesitate to contact me by email at mstifano@cordobamineralscorp.com or by phone at +1-416-862-5253.
Yours sincerely,
Mario Stifano
President and Chief Executive Officer |
