VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 07/02/13 -- AQM Copper Inc. (TSX VENTURE: AQM)(BVL: AQM) ("AQM " or the "Company") is pleased to announce that Mitsubishi Materials Corporation has agreed to invest US$22.60 million into the Company's wholly owned Peruvian subsidiary Minera AQM Copper Peru S.A.C.("MAQM") and committed an additional US$15.07 million in exchange for an indirect interest of 20% in the Company's Zafranal Project in southern Peru currently owned in a 50-50 joint venture with Teck Resources Limited.
Under the terms of the Subscription Agreement, Mitsubishi Materials Corporation ("MMC") has agreed to subscribe for shares in MAQM for an aggregate purchase price of US$22.6 million, resulting in MMC holding a 40% shareholding interest in MAQM and AQM holding the remaining 60%. The completion of the share subscription is subject to a number of conditions precedent, including the confirmation of representations and warranties of AQM as set out in the Subscription Agreement, compliance with covenants set out in the Subscription Agreement, and completion of certain Peruvian corporate matters necessary to facilitate the share subscription by MMC. The share subscription is expected to close in several weeks once such Peruvian corporate filings and corporate law processes are complete. As MAQM holds a 50% interest in Compania Minera Zafranal ("CMZ"), the Zafranal Project joint venture company, this provides MMC with a 20% indirect interest in CMZ and the Zafranal Project.
Upon the completion of the share subscription, the Company, MMC and MAQM will enter into a joint venture shareholders' agreement pursuant to which MMC and the Company will jointly contribute to MAQM's 50% interest in the Zafranal Project. The Company and MMC have settled the terms and form of the joint venture shareholders' agreement. All major decisions regarding MAQM and the ongoing development of the Zafranal Project will require the approval of both MMC and the Company. During the initial carried period where MMC has agreed to fund an additional US$15.07 million, MMC will have a casting vote on all major decisions.
The additional US$15.07 million that MMC has agreed to fund, is expected to more than cover its 40% share of MAQM's anticipated costs of proposed Pre-Feasibility and Feasibility Studies for the Zafranal Project (subject to approval by the shareholders of CMZ to initiate such studies). AQM's share of MAQM's costs related to such studies will be solely funded from MMC's initial US$22.6 million investment, which is expected to result in the Company holding effectively a carried interest in the Zafranal Project through to a production decision.
Following the carried period, each of MMC and the Company will be required to fund their pro rata share of programs and budgets or will be subject to dilution.
Mr. Bruce Turner, President and CEO of AQM stated that "this significant investment in the project by MMC underscores the quality of the project and an endorsement of AQM's ability to continue to advance it toward production. With this funding in place, we are excited to be positioned to commence progress on a proposed Pre-Feasibility Study in the months ahead. We look forward to having MMC as our partner going forward."
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