Blue Moon Metals (TSXV: MOON) (OTCQB: BMOOF) is acquiring two brownfield copper assets in Norway -- a move the Vancouver-based junior says would provide diversification from its US-based project as well as more emphasis on near-term copper.
In its press release on Wednesday, Blue Moon disclosed that it will acquire the Nussir and NSG properties in two separate deals valued at US$55.3 million and US$12 million respectively. Both deals will be satisfied through the issuing of common shares priced at $0.30 each.
Blue Moon's stock traded at $0.35 by market close, for a market capitalization of $18.8 million. Its 52-week high was $0.43, while its low during that period was $0.03.
Newly appointed CEO Christian Kargl-Simard said the transactions would "create a new copper-zinc development company located in Tier 1 jurisdictions," noting that Norway is a member of the US-led Minerals Security Partnership (MSP) that aims to secure the supply of critical raw materials including copper and zinc.
Of the two copper projects, Nussir is the more advanced asset with existing critical infrastructure located next to the property (access, power, port, etc.). The property hosts a historic mine that was in production during the 1970s, with mining occurring from four shear-hosted open pits until operations halted in 1979.
The project owner, Norway's Nussir ASA, has been focused on advancing a sedimentary hosted copper deposit on the same project with analysis, study work and permits granted over a 20-year period. SRK Consulting (UK) completed an updated JORC-compliant feasibility study on the construction-ready project in May 2023, with an initial capital cost estimated at US$101 million.
The SRK report outlined a historic resource estimate of 1.7 million tonnes at 1.16% copper, 0.22 g/t gold and 13.3 g/t silver in the measured category, 31.8 million tonnes at 1.09% copper, 0.13 g/t gold and 12.6 g/t silver in the indicated category, and 33.4 million tonnes at 1.16% copper, 0.17 g/t gold and 16 g/t silver in the inferred category.
It also highlighted various opportunities to increase global resources, such as upgrading the undrilled areas of the approximate 10 km resource trend and infilling high-grade resource (+2% copper equivalent) areas that have seen limited drill density; defining the parallel zone at the Nussir property, which does not currently have any resources; Drilling underneath the historical open pit production through the existing 2.5 km underground tunnel; and drilling a geochemical anomaly between the historical open pits and the Nussir property.
Blue Moon said it will focus the next 18 months on investigation these opportunities aimed at increasing both shear-hosted and sediment-hosted resources through primarily drilling from underground, after which it plans to complete a feasibility study and make a full construction decision.
The underground decline construction is expected to begin in the first quarter of 2025.
Blue Moon said it is also "excited" for potential of the NSG property, held by Nye Sulitjelma Gruver AS in northern Norway, as it would be the first new copper mine in the country in over 50 years.
The NSG property has some of the most attractive rocks in Norway from a historical perspective, with the area having hosted the largest mining operation in the country, the company noted, adding that the remaining deposits still constitute among the largest known copper deposits and are expected to contain significant exploration upside.
While the project has no NI 43-101-compliant resource, it has a historical estimate of 29.4 million tonnes at 0.9% copper and 0.17% zinc. Precious metals and sulfur have not been assayed but are expected to become a credit, Blue Moon said.
Regional exploration activities through underground tunnels at NSG will aim to expand on the significant production history at multiple volcanic massive deposits between 1887 and 1991, it added.
Meanwhile, the company is also advancing its Blue Moon polymetallic project in east-central California, for which a preliminary economic assessment is expected to be completed in Q1 2025.
The polymetallic deposit currently has an NI 43-101 resource estimate of approximately 3.5 million tonnes with a zinc equivalent grade of 11.07% for 431 million lb. of zinc, 53 million lb. of copper, 200,000 oz. of gold and 5 million oz. of silver in the indicated category, plus 3.8 million tonnes at 10.71% zinc equivalent for 455 million lb. of zinc, 45 million lb. of copper, 200,000 oz. of gold and 6 million oz. of silver in the inferred category.
Blue Moon is currently focused on drilling off the existing volcanic massive sulphide resources with the aim of upgrading to reserve status from underground, and extending the deposit down dip.
The property also has prior mining history. Under the ownership of Hecla Mining Company during 1943-1945, it produced 55,656 tons grading 12.3% zinc, 0.36% copper, 0.48% lead, 3.75 oz/t silver and 0.062 oz/t gold. The property was more recently actively explored and advanced by Imperial Metals, Boliden and Lac Minerals (now Barrick).
With the addition of Nussir and NSG, Blue Moon anticipates that production decisions could be made once all three projects have substantially tested their exploration potential, from underground drilling, test mining, mineral sorting and byproduct credit market analysis.
In tandem with the project acquisitions, the company said it will also issue new equity worth between $30 million and $50 million, the bulk of which will be used to fund the planned work at the Nussir property. This financing will comprise units of Blue Moon priced at $3.00, with each unit comprising one share (priced at $0.30, or one-tenth of the unit price) and nine subscription receipts.
Together with the shares issued in acquiring the projects, the implied equity value of the transactions is approximately US$100 million to US$115 million on a fully diluted in-the-money basis. At the minimum, existing Blue Moon shareholders would own 12% of the company, while the Nussir and NSG shareholders would own 55% and 12%, respectively. At the maximum, the respective shareholdings would be 10%, 48% and 10%.
November 28, 2024
November 28, 2024
November 28, 2024
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