Exploring the Kutcho high-grade copper-zinc-silver-gold project located 100 km east of Dease Lake, northern British Columbia. Photo courtesy Kutcho Copper Corp.
Kutcho Copper Corp. [KC-TSXV], formerly Desert Star Resources Ltd., recently completed the acquisition of the Kutcho high-grade copper-zinc-silver-gold project located 100 km east of the small community of Dease Lake, northern British Columbia. The company also closed a $20-million subordinated secured convertible term debt loan and a US $65 million early deposit precious metals purchase agreement (PMPA) with Wheaton Precious Metals Corp. [WPM-TSX, NYSE], and the subsequent release of escrowed funds and conversion of subscription receipts under a $14.7 million private placement. Along with the closing of the acquisition, Desert Star changed its name to Kutcho Copper Corp.
"The completion of the acquisition of Kutcho and over $100-million financing package represents a transformational step forward for the company," stated Vince Sorace, President and CEO of Kutcho Copper. "The Kutcho Project is a highly prospective advanced-stage project with significant near-term upside potential in both project optimization and resource expansion. With the acquisition complete, we look forward to aggressively advancing Kutcho towards a feasibility study and to working closely with First Nations, local communities and all levels of government to move the project towards production."
The company acquired 100% of Kutcho from Capstone Mining Corp. [CS-TSX] for total consideration of $28.8 million in cash plus the issuance of 4,646,892 shares of the company. Assuming the exercise of warrants received by Wheaton, Wheaton would hold approximately 18.5% of the shares of Kutcho Copper.
Kutcho Copper previously filed an independent technical report entitled Prefeasibility study technical report on the Kutcho Project, British Columbia dated July 31, 2017.
Immediately prior to the completion of the acquisition, Kutcho Copper closed the previously announced $20 million, seven-year term debt loan with Wheaton Precious Metals.
Kutcho Copper has now retained the engineering services of Len Holland of Holland & Holland Consultants, UK that will lead the 2018 metallurgical program. The comprehensive metallurgical study is expected to optimize metallurgical processes and will provide vital support for the Feasibility Study.
"Kutcho has a relatively coarse primary grind size for a typical VMS deposit, compatible with a standard flotation recovery process, facilitating a simplified mill design," said Holland. "I look forward to the opportunity of advancing metallurgical processes at Kutcho for the feasibility study."
In addition, the company has acquired 10 tonnes of mineralized material from Capstone Mining that has been refrigerated and packed in nitrogen from a previous study. Kutcho Copper will evaluate the integrity of the material for use in the 2018 test work, which could allow the company to realize significant time and cost savings as compared to gathering new metallurgical sample material.