Western Copper welcomes Mitsubishi investment

Western Copper & Gold Corp.’s [WRN-TSX, NYSE American] said Friday it will receive a strategic investment by Japanese industrial giant Mitsubishi Materials Corp. to further advance the company’s 100%-owned Casino copper-gold-molybdenum deposit in the Canadian Yukon.

The company said Mitsubishi has agreed to acquire a number of common shares that will represent approximately 5.0% of Western’s issued and outstanding shares, on an undiluted basis, following completion of the investment, at a price of $2.63 a share.

However, the exact number of shares to be issued and proceeds received will depend on whether Rio Tinto Plc’s [RIO-NYSE] Canadian unit elects to exercise its pre-existing right to participate in equity offerings in order to maintain its current ownership interest, which currently stands at 7.84%.

If Rio Tinto exercises its participation right in full, it is expected that 8.1 million shares will be issued to Mitsubishi Materials for aggregate proceeds of $21.3 million, and 878,809 shares would be issued to Rio Tinto, worth $2.3 million.

“We are pleased to welcome Mitsubishi Materials as a strategic investor in the company,’’ said Western President and CEO Paul West-Sells. “The investment by Mitsubishi is a strong endorsement of the Casino project. We look forward to working with Mitsubishi Materials to advance Casino.’’

In connection with the investment, Mitsubishi will hold certain rights including the right to appoint one member to the Casino project technical and sustainability committee. It can also appoint the greater of one director of the company, or 17% of the number of directors (rounding out the nearest whole number), if Mitsubishi’s ownership increases to at least 12.5%.

Those rights will remain in place until the earlier of its ownership falling below 3.0% or until the date that is 24 months after the investment is completed.

Western Copper shares advanced on the news, rising 0.84% or $0.02 to $2.39 in light trading volume. The shares are currently trading in a 52-week range of $3.00 and $1.56.

Mitsubishi is a Japanese industrial giant engaged in the production of automotive, electronic and metal products. Its involvement in Casino comes roughly two years after Rio Tinto made a $35.6 million strategic investment in Western Copper & Gold.

The move was seen at the time as an opportunity for Rio Tinto to gain a better understanding of Casino project, which ranks as one of the largest copper-gold projects in Canada. It is estimated to host measured and indicated resources 14.5 million ounces of gold and 7.6 billion pounds of copper. On top of that is an inferred resource of 6.6 million ounces of gold and 3.3 billion pounds of copper.

A preliminary economic assessment (PEA) which was announced in June, 2021,  envisages a large open pit operation, a concentrator to recover copper, gold, silver and molybdenum, and a solid waste facility to store mine waste rock and mill tailings.

The project will also feature a heap leach facility to recover gold, silver, and copper from oxide ore as well as 130 kilometres of access road and an on-site power generation facility.

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