Glencore Contributes $10M to Falco’s Horne 5 Project

Glencore Canada Corp. has agreed to provide $10 million senior secured convertible debenture bridge financing to fund the advancement of the Falco Resources’ Horne 5 project in Rouyn-Noranda, Québec. It has also entered into life of mine copper and zinc concentrate offtake agreements with the company.

“The processing of Horne 5 copper concentrate at Glencore’s Horne Smelter will also add to the local economic benefits generated by the Horne 5 Project,” Falco President and CEO Luc Lessard said. “The bridge financing provided by Glencore clearly supports the advancement of the work plan in order to continue to reduce risks, resolve challenges and identify additional synergies, all with the goal of working toward a principal operating license and indemnity agreement and commencing dewatering.”

He added that the concentrate agreements, the potential equity ownership, and the 2% net smelter return royalty interest provide a strong alignment between the companies.

Glencore Global Head of Copper Metallurgical Operations Marc Bédard said, “While there remains significant work to be done and challenges to be addressed, Glencore Canada is committed to working with all stakeholders toward creating the winning conditions necessary for the further development of the Horne 5 project and of the fully integrated copper industry in Quebec, an industry vital to the transition toward the electrification of transportation.”

Funds will be used primarily for technical work, studies and modelling necessary to continue to reduce project risks, including risks to Glencore’s Horne Smelter, resolve technical and other challenges and identify additional synergies, all with a goal of working toward a principal operating license and indemnity agreement between Falco and Glencore, according to the companies.

The convertible debenture has an initial term to maturity of 12 months and will bear interest at a rate of 7% per year, compounded quarterly. It can be converted into common shares of the corporation within 10 days of the maturity date.

Falco also issued to Glencore 12,195,122 common share purchase warrants of the Corporation. Each warrant shall be exercisable for one Share at an exercise price of $0.51 up to 12 months from the date of issuance of the warrants.

Glencore will purchase the copper and zinc concentrate produced during the life of mine of the Horne 5 Project, which is currently estimated at 15 years.

The copper concentrate will be processed at Glencore’s Horne Smelter located adjacent to the Horne 5 Project.

Falco continues the necessary work to respond to government inquiries about the initial filing of the Environmental Impact Study, and initiate the public consultation process in mid-to-late 2021.