08/10/2013 - 10:28

Avanco in line for $US12m royalty investment

08/10/2013 - 10:28

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West Perth-based junior Avanco Resources has secured agreement for a $US12 million royalty-based investment deal with major resources investor BlackRock World Mining Trust.

Avanco in line for $US12m royalty investment

West Perth-based junior Avanco Resources has secured agreement for a $US12 million royalty-based investment deal with major resources investor BlackRock World Mining Trust. 

Avanco said today it had reached a non-binding agreement on key commercial terms for the deal, which would see BlackRock provide $US12 million in exchange for royalty payments from Avanco's Antas North copper mine, which the company is working towards developing in Brazil. 

BlackRock will receive royalties of 2 per cent on copper, 25 per cent on gold and 2 per cent on all other metals produced from Stage 1 and 2 licence areas at the project under the deal.

Avanco said the deal would cover the shortfall between Avanco's $US58 million debt facility and the $US70 million expenditure required at the Antas North project without diluting shareholder return.

The transaction is subject to a number of conditions, including satisfactory completion of due diligence by BlackRock and agreements on the legal and tax structure of the proposed deal.

Avanco said BlackRock had not expressed interest in board positions as part of the deal.

Shares in Avanco gained more than 12 per cent to reach 9.3 cents at 10:30AM WST.

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