Luminex Signs LOI with BHP for Tarqui Copper Concessions
Luminex Resources has entered a letter of intent with a BHP subsidiary regarding the company’s Tarqui 1 and 2 mining concessions in Ecuador.
Luminex Resources (TSXV:LR) has entered a non-binding letter of intent (LOI) with a BHP (ASX:BHP,NYSE:BHP,LSE:BHP) subsidiary regarding the company’s Tarqui 1 and 2 mining concessions in Ecuador.
The LOI, laid out for an earn-in and joint-venture agreement, entails BHP having the right to earn up to 70-percent ownership in Tarqui by investing up to US$75 million in exploration. Additionally, the company will have to pay up to US$7 million in cash to Luminex for the ownership.
“Luminex is excited to advance Tarqui with an organization like BHP that has the opportunity and commitment to supplying future global copper demand and a strong focus on responsible development in Ecuador,” Luminex CEO Marshall Koval said in a statement.
“Tarqui is an exciting copper prospect that BHP and Luminex will pursue over the coming years.”
Should BHP gain the majority ownership, it will be responsible for managing the joint-venture company and Tarqui’s exploration program. As such, Luminex would retain a 30-percent stake in the asset and would maintain responsibility for funding its share of any necessary capital requirements.
Luminex currently has two other earn-in agreements under its belt in Ecuador; one is for the Pegasus project with Anglo American (LSE:AAL,OTCQX:NGLOY), and the other is for the Orquideas and Cascas assets with First Quantum Minerals (TSX:FM,OTC Pink:FQVLF).
While Ecuador is still considered a mining jurisdiction with a fair share of risk, the South American country has caught the attention of miners like Adventus Zinc (TSXV:ADZN,OTCQX:ADVZF), Lundin Gold (TSX:LUG,OTC Pink:FTMNF) and SolGold (TSX:SOLG,LSE:SOLG,OTC Pink:SLGGF) in recent years.
Despite some of the risk associated with Ecuador, Founder of Junior Stock Review Brian Leni recently gave the Investing News Network his opinion on why investors shouldn’t overlook the country’s opportunities.
“One of the big reasons why I think the window of investment is opening in Ecuador is the election of Lenin Moreno,” he said. “Although his political ideologies seem to be shifting to the left, he has publicly stated the need for Ecuador to attract mining investment.”
As of March 18, copper was trading at US$6,491.5 per tonne on the London Metal Exchange.
At the end of trading on Tuesday (March 19), BHP was up 1.65 percent on the ASX, closing at AU$37.59 per share. Meanwhile, on the TSX, Luminex grew 25 percent to C$0.75 per share by 3:06 p.m. EST.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.
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