Interest in Constancia Copper Project set to Increase to 81%
Shares Issued and Outstanding: 37,912,878
VANCOUVER and LIMA, Peru, Nov. 29 /CNW/ - Norsemont Mining Inc. (TSX:
NOM, BVL: NOM) ("Norsemont", the "Company") today announced that the Company
has exercised its exclusive option to aquire an initial 51% of the Constancia
copper project from Rio Tinto. Combined with the 30% interest that the Company
recently acquired from Mitsui Mining and Smelting, this acquisition brings
Norsemont's interest in the Constancia Project to 81%. The Constancia Project
is located in southern Peru.
In order to exercise the initial option, granted in 2005, Norsemont was
obligated to completed work expenditures at Constancia of US$7.8 million, make
US$5 million of payments and issue 1,250,000 common shares (or their cash
equivalent) to Rio Tinto. All three obligations have been met.
Under the terms of the same Rio Tinto option agreement, Rio Tinto has 60
days within which to decide whether to claw back a 17% undivided interest in
Constancia. This can only be done if, in the reasonable opinion of Rio Tinto,
Constancia's global resource estimate is not less than four million tonnes
(8.8 billion pounds) of contained copper. In the event that Rio Tinto claws
back a 17% interest, they will have to pay Norsemont three hundred percent
(300%) of the Company's net cash payments, work expenditures and share
issuances related to the project. If Rio Tinto does not exercise its claw back
within 60 days, Norsemont may acquire the remaining 19% interest for US$8
million, which would bring the Company's interest in Constancia to 100%.
Commenting, Norsemont's President and COO Bob Baxter said: "This
represents a key milestone in Norsemont's development. The recently completed
Constancia scoping study demonstrates that the project is very robust and has
the potential to produce up to 90,000 tonnes of copper per annum at cash
operating costs of less than $0.75 per pound. The study also confirmed that,
using a long-term price of US$1.80 per pound of copper, Constancia's net
present value is in excess of $400M and the IRR is in excess of 21 percent.
The exercise of the Rio Tinto initial option places Norsemont in a control
position over Constancia and is an important step in achieving 100% ownership
in the project."
Norsemont Mining is a Canadian mineral exploration and development
company focused on the Constancia copper/molybdenum/silver project in southern
Peru. Norsemont recently announced that it purchased a direct 30% interest in
the Constancia Project from Mitsui Mining and Smelting. The Company has also
exercised the Rio Tinto initial option in terms of which it can acquire an
additional 51% interest in Constancia.
This News Release contains certain forward-looking statements, including
statements of the Company's plans, objectives, strategies, expectations and
intentions that involve risks and uncertainties. The words "may", "would",
"could", "will", "intend", "plan", "anticipate", "believe", "estimate",
"expect" and similar expressions, as they relate to the Company, or its
management, are intended to identify such forward-looking statements.
The TSX does not accept responsibility for the adequacy or accuracy of
For further information:
For further information: Patrick Evans, Tel: (416) 670-5114, E-Mail: