US$5M cash injection following revised asset sale
Our Ecuadorian gold and copper Investment Titan Minerals (ASX:TTM) has renegotiated terms for the sale of its Zaruma mine and Portovelo process plant in Ecuador to Pelorus Minerals, with an extra US$5M coming its way.
The sale was initially announced in late July 2021, with Pelorus agreeing to pay US$15M for the asset.
TTM has received US$8.1M from Pelorus to date, and Pelorus has spent a further ~US1.9M advancing Zaruma. Pelorus intended to IPO with the asset but was delayed due to adverse market conditions, leading to a delay in payments and consequently, the renegotiated terms.
Under the revised terms, TTM will receive a further US$5M as full and final settlement of the Zaruma sale.
The payments will be staged as following:
- US$1 million, which has now been received
- US$2 million payment before the end of October 2022
- US$2 million payment by Monday, 19 December 2022
We like that TTM is set to receive a substantial cash injection of some US$5M (roughly A$8M at today’s exchange rate) as part of the sale of a non-core asset, as it positions the company well to fund the advancement of its Dynasty and Linderos copper/gold projects.
TTM held ~A$2.7M as at 30 June 2022, so with the incoming Zamara funds, we think TTM is unlikely to need to raise capital in the short term.
Next up for TTM, we’re keen to see the assays from the Copper Ridge prospect within Linderos, especially given that long intervals of porphyry style chalcopyrite-pyrite- molybdenite mineralisation were observed within the first two holes drilled. We anticipate these to be ready around mid-November.
