World Copper Ltd. (“World Copper” or the “Company“; TSXV: WCU, OTCQB: WCUFF, FSE: 7LY0) announces that the Company has entered into a binding letter agreement made as of February 12, 2025 (the “Letter Agreement“) to sell its interest in the Zonia copper project located in the Walnut Grove Mining District, Yavapai County, Arizona (“Zonia” or the “Project“) to an arm’s length third party (the “Purchaser“) in consideration for CAD $26.0 million cash (the “Purchase Price“), payable in tranches (the “Proposed Transaction“).
The Letter Agreement provides for a 90-day due diligence period and sets forth the proposed commercial terms for the Proposed Transaction. It is currently expected that the Proposed Transaction will be effected by way of a share purchase and sale transaction pursuant to which the Purchaser would acquire all of the issued and outstanding shares of the Company’s Arizona subsidiary, Cardero Copper (USA) Ltd. (“Subco“). Following completion of due diligence to the satisfaction of the Purchaser, the parties will have 15 days to enter into a definitive agreement. The payment of the Purchase Price shall be payable as to CAD $8.0 million to World Copper at closing of the Proposed Transaction (the “Closing“), an additional instalment of CAD $8.0 million on or before the 15-month anniversary of Closing, and a final instalment of CAD $10.0 million on or before the 30-month anniversary of Closing, subject to the Purchaser’s right to accelerate the additional instalments. Until the payment in full of the Purchase Price, it is proposed that the shares of Subco will be held in escrow, and the Purchaser will grant World Copper a security interest over such shares and the Project. If the Purchaser fails to make any instalment payment for the Purchase Price, the shares of Subco will be returned to World Copper and the Purchaser would retain no interest in the Subco shares or the Project.
The Purchaser is a European based metals and mining investment manager with two decades of leadership in investing in and developing mining projects worldwide. Completion of the Proposed Transaction is subject to, among other things, satisfactory completion of due diligence by the Purchaser, the Purchaser obtaining financing to complete the Proposed Transaction, the parties entering into a definitive agreement which will contain customary terms and conditions for a transaction of this nature, and receipt of all necessary shareholder, board and regulatory (including TSX Venture Exchange) consents and approvals. A USD $75,000 break fee is payable by World Copper if it terminates the Letter Agreement. Finder’s fees in the amount of up to 4% will be payable in connection with the Proposed Transaction, subject to TSX Venture Exchange approval. World Copper plans to issue a comprehensive news release detailing the Proposed Transaction once further updates become available.
