Falco Resources Ltd. entered into an agreement with Glencore Canada Corp. establishing the framework the companies will enter into with the Principal Operating License and Indemnity Agreement (OLIA) to enable Falco to develop and operate its flagship Horne 5 Project. It is anticipated that the OLIA will be finalized in the third quarter of 2021.
The framework will create technical and strategic committees with representatives from both companies to collaborate on the development and operation of the Horne 5 Project and to capitalize on the many synergies between them; the right to appoint one Glencore representative to Falco’s Board; rights of access, use and transformation rights in favor of Falco; and financial assurance including guarantees, and indemnification to cover risks to Glencore’s copper smelting operations (the Horne smelter).
The October 2020 life of mine offtake agreements for the copper and zinc concentrates and the updated feasibility study will also form part of the final OLIA.
“This agreement is a major milestone for the development of the Horne 5 Project that we have been working toward over the last five years,” Falco President and CEO Luc Lessard said. “It is the culmination of an extensive technical and strategic collaboration between Falco and Glencore and, together with the significant advancement of the work program, has enabled the parties to build the foundation for the OLIA.”
Lessard said the work program, which started in November 2020, has also identified and mitigated potential risks to the Horne smelter. The key components of the program were established by Glencore after a complete due diligence review of the Horne 5 Project by their technical teams. The Work Program was managed by a joint technical committee and addressed key components, such as geotechnical advancement; water management of the Horne 5 Project; and synergies between the Horne 5 Project and the Horne Smelter.
The copper produced at Horne 5 and processed through Glencore’s integrated Quebec Copper Operations will be some of the greenest and lowest-carbon footprint copper in the world, according to the companies.