Introduction

Cordoba Minerals (TSXV: CDB) has finalized a significant deal to sell its remaining 50% stake in the Alacrán copper project in Colombia to a consortium of investors, including China’s JCHX, for a potential total of $128 million. This follows the sale of the initial 50% stake to JCHX in 2022 for $100 million, marking a complete divestiture of the project by Cordoba.

Main Body

The Alacrán project, located in Puerto Libertador, is poised to become Colombia’s largest copper mine and has been designated a 'Project of National Interest' by the Colombian government. Already permitted and in advanced development, the project is backed by a 2023 feasibility study projecting production of nearly 800 million pounds of copper, alongside gold and silver, over a 14-year mine life. The study estimates an after-tax net present value of $360 million (8% discount), an internal rate of return of 23.8%, and a payback period of three years, with an initial capital cost of $420 million.

Under the latest agreement, Cordoba will receive an upfront payment of $88 million, a deferred payment of $12 million upon commercial production or within three years of closing, and contingent payments of up to $28 million based on copper market conditions at the time of production. This transaction also includes the broader San Matias exploration property. Post-sale, Cordoba’s primary asset will be the Perseverance copper project in Arizona, explored in a joint venture with Bell Copper.

Cordoba’s stock surged to a 52-week high of C$0.92 before trading was halted on Thursday, with the company holding a market capitalization of C$83.8 million. CEO Sarah Armstrong-Montoya highlighted JCHX’s proven track record in delivering large-scale mining projects, suggesting the consortium is well-positioned to advance Alacrán.

Analysis and Opinion: This deal underscores the growing influence of Chinese investment in global mining, particularly in strategic metals like copper, amid rising demand for renewable energy and electrification. JCHX’s involvement, already holding a 19.81% stake in Cordoba, raises questions about the long-term implications for Colombia’s resource sovereignty. How will this impact local communities and environmental standards, given the project’s scale? Additionally, with Cordoba now focusing on its Arizona asset under Ivanhoe Electric’s majority ownership (63%), will the company pivot successfully, or does this signal a narrower operational focus?

Conclusion

Cordoba Minerals’ full divestiture of the Alacrán copper project marks a pivotal shift for the company, redirecting its focus to the Perseverance project in Arizona. While the financial terms appear lucrative, the transaction reflects broader trends in global mining investments and raises critical questions about resource control and sustainability in Colombia.