Titan Minerals Limited (ASX: TTM) has entered into a term sheet with Pelorus Minerals Limited for divestment of its non-core Zaruma Mine and Portovelo Process Plant assets in Ecuador.
Subject to the parties finalising and executing a formal binding transaction agreement and the buyer finalising its due diligence investigations within a 30-day exclusivity period from the date of the Term Sheet, Titan will receive proceeds from the sale of the non-core assets of US$15 million in staged cash payments plus a two percent (2%) net smelter return royalty on the value of any recovered and realisable copper produced from any of the Zaruma Mine concessions.
Titan Minerals Managing Director, Laurie Marsland said the asset sale, together with the ongoing in-country strategic review and corporate restructuring will allow Titan to resolve the balance sheet issues it inherited following the acquisition of Core Gold Inc. in 2020.
He said the cash proceeds will allow Titan to focus its full attention on the development of its flagship Dynasty Gold Project and exploration at the Copper Duke Project in Ecuador.
Titan’s core focus remains firmly set on developing the Dynasty Gold Project and making a discovery at the Copper Duke Project in Ecuador,” Mr Marsland said.
“Given the improvement in our financial position as a result of this non-core asset sale, we expect to continue drilling and deliver an updated JORC resource at Dynasty following the completion of the Cerro Verde drill programme.
“The sale of the Zaruma Mine and the Portovelo Process Plant strengthens our balance sheet and allows us to reduce and manage the liabilities we inherited following the Core Gold acquisition.
“The sale of Zaruma and Portovelo has been a lengthy complicated process. We acknowledge the patience of our shareholders and appreciate their continued support.
“With the focus on creating value for our shareholders, divestment of other non-core assets is planned over the remainder of this year.”
The Zaruma Mine is located in the Zaruma-Portovelo mining district and comprised of 30 concessions totalling 7,615 Ha. The concessions are currently being transferred into newly established corporate entities as part of a corporate restructuring that is expected to be complete in the near term.