MAX Resource has executed an earn-in agreement (EIA) with Freeport-McMoRan Exploration, an affiliate of mining giant Freeport-McMoRan (Freeport), for its Cesar Copper-Silver Project in north-western Colombia.
The deal could lead to Freeport acquiring up to an 80% interest in the project.
Under the agreement, Freeport has the option to invest C$50m in cumulative expenditures and make cash payments to Max Resource totalling C$1.55m to secure its stake.
The initial phase requires Freeport to fund C$20m in exploration over five years and make staged payments of C$0.8m to earn a 51% interest.
During this initial stage, Max Resource will retain operational control of the Cesar Project.
Following the acquisition of the 51% interest, Freeport has the opportunity to increase its stake to 80% by committing an additional C$30m to exploration and making further payments of C$750,000 over the subsequent five years.
The completion of this transaction is contingent upon the approval of the TSX Venture Exchange.
The Cesar project encompasses three districts that extend more than 120km in a north-northeast/south-southwest direction, offering access to robust infrastructure due to the presence of significant oil, gas and mining operations, including the Cerrejón mine operated by Glencore.
Max Resource's holdings in the region include 20 mining concessions covering more than 188km², positioning the company as a significant player in the Colombian mining sector.
Max Resource CEO Brett Matich said: “Careful consideration was given in selecting the best suited earn-in party for Cesar, and access to Freeport's global team and expertise is aimed at unlocking Cesar's potential.
“Freeport has a track record of global copper discoveries that have proceeded to mine development and production. Max looks forward to advancing our Cesar Project with Freeport, one of the world's largest copper producers.
“The Cesar Project is host to one of the world's largest underexplored sedimentary copper-silver systems, and we believe Freeport's endorsement of the Cesar Project is a testament to its potential for hosting a world-class deposit.”
