Duluth Metals Announces Joint Venture With Antofagasta

Duluth Metals Announces Joint Venture With Antofagasta

TORONTO, ON – Duluth Metals Limited reported that it has signed a binding heads of agreement with Antofagasta plc on a joint venture development of the large scale Nokomis Project in northeast Minnesota, USA. The joint venture provides the execution and financing capabilities required to aggressively advance this promising copper-nickel-PGM (platinum, palladium and gold) development project to production.

Duluth will contribute the Nokomis Project and approximately 5,000 acres in the Duluth Complex for a 60% interest in the joint venture, with Antofagasta to acquire an initial 40% interest. Antofagasta holds the option to acquire an additional 25% of Nokomis from Duluth at an exercise price calculated on a pro rata share of 1.0x Net Asset Value, which will be determined by the Bankable Feasibility Study.

Antofagasta will provide US $130 million in direct funding to the project for its 40% interest in the joint venture. Thereafter, if Antofagasta elects to proceed with the further funding of the project and to maintain its 25% Option, Antofagasta will disproportionately fund 65% of the joint venture expenditures and Duluth will fund 35%.

Additionally, Antofagasta has agreed to provide Duluth with up to US $30 million in additional funding to cover Duluth‘s share of subsequent project expenditures, which will ultimately be repayable in cash, Duluth shares or offset against the 25% Option exercise price.

Antofagasta will also subscribe to a private placement of Duluth shares for approximately US $11.6 million.

The combination of the initial funding commitment, private placement and incremental funding from Antofagasta ensures that up to US $ 227 million of funding will be available to advance the project with Antofagasta involvement, before any additional funding would be required from Duluth.

Antofagasta has also committed to pursue project financing, on a common basis with Duluth in respect of the large development capital cost financing requirements of the project.

The company’s address is 80 Richmond St West, Suite 1500, Toronto, ON M5H 2A4, 416-369-1500, fax: 416-369-1501.