Copper Giant Resources Corp. Announces C$31 Million Strategic Financing Led by Denarius Metals and Long-Term Offtake Agreement with Trafigura

TSXV: CGNT | OTCQB: LBCMF | FRA: 29H0

Overview

Copper Giant Resources Corp. announced that it has entered into a definitive agreement with Denarius Metals Corp. under which Denarius will make a strategic equity investment in Copper Giant by way of non-brokered private placement, and a separate definitive agreement with Trafigura Pte Ltd under which Copper Giant will grant Trafigura long-term offtake rights over a portion of future copper and molybdenum concentrate production from its Mocoa copper-molybdenum project in Putumayo, Colombia, according to the company.

According to the company, the Financing is for aggregate gross proceeds of C$30,999,996, with a lead order from Denarius of C$28,800,000. Frank Giustra and Ian Harris, President and Chief Executive Officer of the Company, are also participating in the Financing. The offtake is conditional on completion of the Financing, according to the company.

Key Highlights

• Copper Giant will issue 43,055,550 common shares at C$0.72 per share for aggregate gross proceeds of C$30,999,996, according to the company.
• Denarius will subscribe for 40,000,000 common shares for C$28,800,000, representing 15.6% of the Company's issued and outstanding shares on closing, according to the company.
• Frank Giustra will subscribe for 2,777,775 common shares, resulting in Mr. Giustra holding 15.8% of the Company's issued and outstanding common shares on a partially diluted basis, and Ian Harris will subscribe for 277,775 common shares, according to the company.
• Denarius, Frank Giustra and Ian Harris have each agreed to enter into two-year lock-up arrangements in connection with the Financing, according to the company.
• Trafigura will have the right and obligation to purchase 20% of the copper concentrate and 20% of the molybdenum concentrate produced from the Mocoa Project, for ten years from the commencement of commercial production, subject to minimum delivered volumes over the period, according to the company.
• Copper Giant will appoint Carlos Augusto Suárez Rojas to its board of directors and Federico Restrepo-Solano, Chief Executive Officer of Denarius, to its advisory board, according to the company.
• On closing, the Company will have 256,429,248 common shares issued and outstanding, and no finder's fees will be payable in connection with the Financing, according to the company.

Strategic/Operational Context

According to the company, together the Financing and the offtake bring a cornerstone shareholder, strategic capital from investors committed for the long term, a committed route to market for future concentrate, and the capital to fund and accelerate the next phase of work at Mocoa, beyond the Preliminary Economic Assessment currently underway and toward a construction decision.

According to the company, Ian Harris, President and Chief Executive Officer of Copper Giant, stated: "This transaction changes the trajectory of Mocoa. Denarius's investment gives us the capital to move through the PEA and accelerate the next phase toward a construction decision, while Trafigura provides a long-term route to global markets. Together, these partners bring Colombian operating experience, market reach and long-term alignment at a pivotal moment for copper and for Colombia."

According to the company, Serafino Iacono, Executive Chairman of Denarius Metals, stated: "We know Colombia and we know what it takes to move a project from resource to operation. Mocoa stands out for its scale, its copper-molybdenum endowment and its potential importance to Colombia's mining future. We are investing as a long-term partner because we believe Copper Giant has the asset and the team to advance it responsibly."

According to the company, Edmundo Vidal, Director Latin America at Trafigura, stated: "Colombia has the geological conditions and the opportunity to become an important copper producer. We are pleased to see projects like Mocoa develop, especially given the country's recognition of copper as a strategic mineral. Our long-term offtake at Mocoa reflects both our confidence in the project, and our strategy of working with producers to bring new supply to customers around the world."

According to the company, the subscription price is C$0.72 per common share and all common shares issued pursuant to the Financing will be subject to a four-month-and-one-day hold period. On closing, Denarius will become a new insider of Copper Giant pursuant to Canadian securities laws and will be subject to all insider filings. The participation of Ian Harris (an insider) and Frank Giustra (a significant shareholder) constitutes a "related-party transaction" as defined under Multilateral Instrument 61-101, and the Company expects such participation will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101, according to the company.

What to Watch Next

• Closing of the Financing, which is a condition to the effectiveness of the Trafigura offtake agreement, according to the company.
• Completion of the Preliminary Economic Assessment currently underway at the Mocoa Project, according to the company.
• Progress toward a construction decision at Mocoa following deployment of the new capital, according to the company.
• Formal appointments of Carlos Augusto Suárez Rojas to the board of directors and Federico Restrepo-Solano to the advisory board, according to the company.

About Copper Giant Resources Corp.

Copper Giant Resources Corp. (TSXV: CGNT) (OTCQB: LBCMF) (FRA: 29H0) is a Canadian mineral exploration and development company advancing the Mocoa copper-molybdenum project in Putumayo, southern Colombia, according to the company.

Read full press release here.

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