Arizona Sonoran Copper (TSX: ASCU; US-OTC: ASCUF) has entered into a partnership with Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO) focused on the latter's Nuton venture and a non-brokered private placement for total gross proceeds of up to $30.5 million.
Nuton technologies offer a portfolio of proprietary copper leach related technologies and capability developed by Rio Tinto to deliver increased copper recovery from mined ore and access new sources of copper such as low-grade sulphide resources and reprocessing of stockpiles and mineralised waste.
The technologies also have the potential to lead to more efficient water usage, lower carbon emissions and have the ability to reclaim mine sites by reprocessing waste.
Rio Tinto struck a similar deal with Lion Copper and Gold (TSXV: LEO; US-OTC: LCGMF) in March, where the company aimed to deploy the potential commercial deployment of its Nuton technologies at site.
Arizona is also conducting a structured non-brokered private placement for up to $30.5 million that will see Rio Tinto subscribe for 6.4 million common shares and Tembo Capital Elim Co-Investment LP for about 3.9 million common shares. Once the deal is completed, Rio Tinto will hold 7.4% of Arizona, while Tembo's share will be reduced to 35.5% from 37.6%.
"We are thrilled to introduce Rio Tinto as a key shareholder... we are also thankful for our continued support from current shareholders, including Tembo," the company's CEO George Ogilvie said in a press release.
"This private placement provides the company with significantly more capital... by way of intensive exploration at Parks/Salyer (P/S) and metallurgical testing of the primary chalcopyrite material at Cactus, which is not currently in the preliminary economic assessment mine plan," he added.
Located on private land in western Pinal County, Arizona, Cactus is Arizona's flagship project. Early studies indicate that the copper project could produce 56 million lb. of copper annually over 18 years. The company, however, is working on increasing its production levels. The P/S project is located 2 km southwest of the Cactus project and is currently being explored.
The company expects construction to start as early as 2023 with production beginning in 2024 and believes that the project, including both Cactus and Parks/Salyer can reach a production profile of between 80 to 100 million pounds of copper cathode a year, which he says would increase the company's enterprise value from about US$130 million to nearly US$800 million.
At press time in Toronto, Arizona Sonoran Copper was trading at $2.26 per share, up 19 ? or 9%, within a 52-week trading range of $1.71 and $2.50. The company has 70.8 million common shares outstanding for a market cap of $16015 million.