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Quaterra Resources (TSXV:QTA,OTCMKTS:QTRRF,FWB:QR2) reported its financial results for 2014. The company noted that it continues to focus on its assets in the Yerington copper district, and has sold its non-Yerington assets with proceeds to be used in support of its Yerington projects.
As quoted in the press release:
The MD&A reports that in 2014 in order to address its working capital needs the Company:
- Sold its uranium properties in Arizona, Utah and Wyoming for Cdn$500,000 in March.
- Sold its interest in three non-core copper and molybdenum assets to Freeport-McMoRan Mineral Properties Inc. for US$5 million in October, payable with an upfront US$1 million and the balance in quarterly tranches of US$500,000 commencing in January 2015.
- Sold its 50% interest in the Nieves project in Mexico to Blackberry Ventures I LLC for US$4 million in December, payable in four tranches of US$1 million over 15 months commencing at the time of closing.
The MD&A reports that with the closing of these transactions management believes the Company has sufficient funds for the next full year of operations. The Company also continues to take steps to reduce costs.
The company also mentioned details of its membership interest and option agreement signed with Freeport McMoRan Nevada last year:
In addition to cash on hand, reports the MD&A, the ongoing project maintenance costs at Yerington are covered by a Membership Interest and Option Agreement (“Option Argreement”) with Freeport-McMoRan Nevada LLC (“Freeport Nevada”) at least through Stage 1 or through June 13, 2015. Freeport Nevada may continue funding and begin exploration at Yerington beyond June 13, 2015, under the terms of the Option Agreement. Freeport Nevada could also continue to cover project maintenance costs for up to another year without funding exploration, or it could terminate the agreement.
The Option Agreement sets out the terms for Freeport Nevada’s due diligence and potential involvement in advancing exploration of the Quaterra’s Yerington Nevada copper assets. These assets, held in wholly-owned Quaterra subsidiary Singatse Peak Services LLC (“SPS”), include the MacArthur, Yerington and Bear copper deposits. Freeport Nevada may earn 55% to 80% of Quaterra’s interest by spending between US$38 million and US$388 million, depending on various options available to both parties. The Option Agreement was announced on June 16, 2014.
Quaterra president and CEO, Steven Dischler, said:
Even if we were able to raise funds in the current market, given our current share price it would simply be too dilutive. Therefore, we felt the most sensible way to advance our Yerington assets was by the sale of non-core assets together with a joint venture at Yerington. We have completed the former and are positioned to accomplish the latter through the option agreement with Freeport Nevada. With these transactions, we believe Quaterra has sufficient working capital to sustain our operations for an extended period, allowing our shareholders to be positioned for a turnaround in the mining sector.
Click here to read the Quaterra Resources (TSXV:QTA,OTCMKTS:QTRRF,FWB:QR2) press release
Click here to see the Quaterra Resources (TSXV:QTA,OTCMKTS:QTRRF,FWB:QR2) profile.
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