Strategic Collaboration and Financial Boost
Arizona Sonoran Copper Company experienced a 10% increase in its stock value in Toronto following a significant partnership agreement with Rio Tinto subsidiary, Nuton. This collaboration offers Nuton a 40% stake in the Cactus project, located at the site of the historic Sacaton mine south of Phoenix. The deal also provides up to US$33 million in non-dilutive financing to Sonoran, a crucial support given the current challenging capital-raising environment for junior miners.
Technological and Operational Synergy
George Ogilvie, President and CEO of Arizona Sonoran, highlighted the benefits of the partnership, emphasizing access to Nuton’s advanced technology and the technical prowess of Rio Tinto. This alignment could enhance the efficiency and effectiveness of the Cactus project.
Revitalizing Old Mines with Advanced Technology
The Cactus project, one of the top 10 U.S. copper developments in terms of resource size as per S&P Global, demonstrates a growing trend in the mining industry: revisiting old mines with improved technology to meet the increasing demand for metals.
Rio Tinto’s Initial Investment and Impact
In 2022, Rio Tinto invested $30.5 million for a 7.4% stake in the project, potentially utilizing Nuton’s technology. This investment allowed Sonoran to avoid equity dilution through new share issuances. Nuton’s involvement adds credibility and financial stability to the project, which could yield up to 50,000 tonnes of copper cathode annually.
Market Performance and Future Payout
Sonoran’s shares, which fluctuated between $1.30 and $2.40 over the last year, closed at $1.66 on Thursday. The company’s market capitalization stands at $181 million. If Nuton exercises its option, Sonoran could receive a significant payout based on the project’s net present value, reducing its financial burden.
First Commercial Application of Nuton’s Technology
Ogilvie emphasized that the Cactus project would be the first commercial application of Rio’s Nuton technology, and its success could demonstrate its broader applicability. The partnership suggests a strong commitment to the project’s success, likely enhancing project execution and technology implementation.
Resource Update and Future Plans
Arizona-Sonoran substantially increased its measured and indicated resource at the Cactus project, with current figures showing 446 million tonnes grading 0.58% copper. The company plans to release a pre-feasibility study in early 2024, followed by a final feasibility study by the end of the year. Nuton’s decision on exercising its option, along with additional permits and joint venture formalization, are also anticipated in 2024. 
