Falco Resources announces cooperation with Glencore

Falco Resources Ltd. \[FPC-TSXV\] said Monday that there is an agreement in principle with Glencore Canada Corp. on the development and operating license of Falco's flagship Horne 5 gold project in Rouyn-Noranda, Quebec. Falco said the agreement sets the framework under which the two parties will enter into a Principal Operating License and Indemnification Agreement (the OLIA) to enable Falco to develop and operate the Horne 5 project. Falco responded to the news with an increase of 5.3% or $ 0.02 to 40 cents on a volume of 129,160 units. Stocks are currently trading on a 52-week range of 60 cents and 34 cents. Monday's announcement comes after Falco recently agreed to issue a $ 10 million bond to Glencore Canada and its subsidiaries to fund the Horne 5 development. The Horne 5 deposit is located immediately below the former Horne mine, which was operated by the company formerly known as Noranda from 1926 to 1976. These operations produced approximately 2.5 billion pounds of copper and 11.6 million ounces of gold. After the merger with Falconbridge Ltd. in 2005, Noranda continued operations under the name Falconbridge until it was acquired by the Swiss mining company Xstrata in 2006, which was acquired by Glencore PLc (also from Switzerland) in 2013. The Horne 5 Project contains an estimated 6.0 million ounces of proven and probable gold equivalent reserves Feasibility study results, announced in October 2017, predict a 15 year mine life for Horne 5, producing an average of 219,000 ounces of gold per year at a total cost of US $ 399 per ounce, less by-product credits, including royalties . Pre-production construction costs were estimated at $ 801.7 million. The feasibility study envisages full mine production in the first half of 2022. The agreement, announced on Monday, outlines the terms to be included in the OLIA, which will set the framework for Falco's development and operation of the Horne 5 project, including: To create technical and strategic committees, including both Glencore and Falco, to work together in the successful and safe development and operation of the Horne-5 project and capitalizing on the many synergies between the parties. The right to appoint Glencore representatives to the Falco Board of Directors. The life-of-mine purchase agreements for the copper and zinc concentrates. The Horne 5 project is expected to benefit from Glencore's recognized expertise in base metal concentrate processing and metals marketing. Processing Horne 5's copper concentrate at Glencore's Horne Smelter smelter will also add to the local economic benefits generated by the Horne 5 project, the company said.