Hot Chili Ltd. (ASX:HCH) announced that under a joint infrastructure agreement, Chile’s Compania Minera del Pacifico SA will gain a 17.5-percent stake in its Productora copper project.
As quoted in the press release:
CMP will contribute surface rights, easements and its 35% interest in certain Productora tenements in return for a 17.5% stake in the project.
The CMP assets will help save time and reduce costs associated with the infrastructure needed to underpin Productora. The terms of the agreement are contained in a signed binding MOU.
In addition, Hot Chili will grant CMP an Additional Purchase Option under which CMP may acquire a further 32.6% interest in Productora for a minimum of US$80 million following successful completion of a Pre-feasibility study, expected in the first half of CY2015.
This option compares with Hot Chili’s current market capitalisation of A$70 million at 20c a share.
CMP will pay Hot Chili US$1.5 million for the grant of the Additional Purchase Option subject to ratification of the MOU by CMP’s Board and approval by Hot Chili’s shareholders.
Ratification of the MOU is expected at a CMP Board meeting in the current quarter.
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