TORONTO, June 20 /CNW/ - Zaruma Resources Inc., (TSX-ZMR) is pleased to
announce that in recent discussions with Glencore International AG, Glencore
confirmed its intent to provide US $22 million as debt financing for the
capital requirements of the Luz del Cobre copper project, and also confirmed
its interest in participating in the proposed copper exploration program on
the 9,764 hectare property, which includes the Trion area, 1000 metres to the
west of Luz del Cobre, where a previously undefined oxide copper target zone
has been delineated. In consideration of Glencore's provision of the loan, and
financing the exploration and development of Trion, Glencore shall have the
right to offtake 100 per cent of all base metal production from Luz del Cobre
and Trion, based on London Metal Exchange market prices.
Zaruma is committed to fund any capital cost overruns and will source the
remaining estimated amount of the project cost, estimated to be US $3 million.
The Technical Report on the project, in compliance with NI 43-101
standards, was filed in November, 2006, indicating estimated reserves of 4.4
million tonnes of ore with an average grade of 1% Cu, and based on producing
15 million pounds of copper per year, the pre-tax net operational cash flow
was estimated to average US$19.4 million per year. Adjusting the projected
price of copper to a more recent trailing average price over 24 months of
US$2.51 would add over $4 million the annual cash flow.
The project capital cost is currently estimated at US$25 million, and the
estimated time to first production is 12-15 months from the date an
engineering, procurement and construction management ("EPCM") contract is
awarded. Cost estimates will be more accurately defined as the engineering and
procurement work proceeds.
The selection of the EPCM contractor will be done while the legal
agreements on the financing are being completed.
At today's Annual Meeting of Shareholders, the directors proposed by
management for election, Peter Lorange, Michael Power, Michael Richings,
Thomas Utter and Frank van de Water were re-elected.
Zaruma Resources Inc. is listed on The Toronto and Frankfurt Stock
Exchanges, (symbol: ZMR). Common shares outstanding: 108,296,912.
For further information:
For further information: Zaruma Resources Inc.: 20 Toronto Street, 12th
Floor, Toronto ON, M5C 2B8, Canada, Fax: (416) 367-3638, firstname.lastname@example.org,
www.zaruma.com; Dr. Thomas Utter, President and CEO, Tel.: (416) 777-1781,
email@example.com; Frank van de Water, CFO and Secretary, Tel.: (416)