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Luminex Brings in Third World Class Venture Partner, Signs US$82M Non-Binding LOI with BHP

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Luminex Brings in Third World Class Venture Partner, Signs US$82M Non-Binding LOI with BHP

 

 

 

 

 

Luminex Resources Corp. (TSX-V: LR) (US OTC: LUMIF) is pleased to announce that on March 18, 2019, it entered into a non-binding letter of intent for an earn-in and joint venture agreement with a wholly owned subsidiary of BHP Group plc, on Luminex’s Tarqui 1 & 2 mining concessions in Ecuador.

 

BHP will have the right to earn up to a 70% ownership interest in the Property by investing an aggregate amount up to US$75 million and making up to US$7 million of cash payments to Luminex. Luminex has agreed to work exclusively with BHP to negotiate and complete a binding agreement over the next three months.

 

Marshall Koval, Luminex’s CEO, commented: “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. Tarqui is an exciting copper prospect that BHP and Luminex will pursue over the coming years.”

 

Luminex is now in the unique and fortunate position of having three world class venture partners in BHP, Anglo American and First Quantum on separate exploration projects within its portfolio. These agreements will provide up to US$178 million dollars in aggregate funding(1). Luminex will also continue to advance its 100% owned concessions, Quimi, La Canela and Tres Picachos and its 90% owned Condor project.

 

(1) Up to US$157 million dollars in exploration expenditures and up to US$21 million dollars in cash payments. In addition, First Quantum and Anglo American have options to carry Luminex to a construction decision in order to increase their respective project ownerships to 70%.

 

Summary of Key Terms Contemplated by LOI

 

The LOI envisages a three stage earn-in by BHP where it will have the right to:

 

  1. earn a 51% interest on completion of US$25 million of exploration expenditures and US$2.4 million of cash payments to Luminex within the 4th anniversary of signing of the JV Agreement
     
  2. earn an additional 9% interest on completion of cumulative US$35 million of exploration expenditures and cumulative US$7 million of cash payments to Luminex within the 6th anniversary of signing of the JV Agreement and
     
  3. earn an additional 10% interest on completion of cumulative US$75 million of exploration expenditures.

 

BHP will assume management of the joint venture company and the exploration program for the Property and will have the right to accelerate the exercise of the earn-in by completing all the exploration expenditures and any outstanding cash payments to Luminex in a period shorter than the earn-in term.

 

Assuming completion of the Third Earn-in, Luminex will retain a 30% interest in the Property and would be responsible for funding its 30% pro rata share of any capital required. Entering into the JV Agreement and completing the transactions above are subject to customary conditions, including BHP being satisfied with its due diligence of the Property, approval by Luminex’s board of directors and receipt of all necessary governmental and regulatory approvals.

 

About Luminex Resources

 

Luminex Resources Corp. is a Vancouver, Canada based precious and base metals exploration and development company focused on gold and copper projects in Ecuador. Luminex’s inferred and indicated mineral resources are located at the Condor Gold-Copper project in Zamora-Chinchipe Province, southeast Ecuador. Luminex also holds a large and highly prospective land package in Ecuador consisting of approximately 100 thousand hectares, including the Orquideas and Pegasus projects, which are being co-developed with First Quantum Minerals and Anglo American Plc respectively.

 

Posted March 19, 2019

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