Eagle Mountain Mining has secured a 12-month exclusive option to acquire the Oracle Ridge copper mine’s surface and mineral rights, positioning the company to potentially restart production on a resource containing 380,000 tons of copper.
- 12-month exclusive option agreement with Marble Mountain Ventures LLC
- Option covers surface and mineral rights including infrastructure
- Mineral Resource Estimate of 28.2 million tonnes at 1.35% copper
- Initial option fee of US$80,000 and US$1 million payment upon exercise
- US$9 million final payment due before commercial production
A New Chapter for Oracle Ridge
Eagle Mountain Mining Limited (ASX, EM2) has taken a significant step towards reviving the Oracle Ridge copper mine in Arizona by entering into a binding 12-month option agreement with Marble Mountain Ventures LLC (MMV). This agreement grants Eagle Mountain the exclusive right to acquire the surface and mineral rights of the property, which includes established mine infrastructure and a substantial Mineral Resource Estimate (MRE) of 28.2 million tonnes grading 1.35% copper.
The Oracle Ridge project, long recognized for its copper potential, holds an estimated 380,000 tons of contained copper metal, alongside notable quantities of silver and gold. This resource base offers Eagle Mountain a promising foundation to advance towards commercial production, aligning with the company’s broader strategy to secure long-term access and partner with reputable operators to unlock value.
Terms That Balance Opportunity and Risk
The option agreement requires Eagle Mountain to pay an initial US$80,000 fee for the first six months, with the possibility of extending the option for up to an additional six months at US$12,500 per month. Should Eagle Mountain exercise the option, a US$1 million payment to MMV is due immediately, followed by annual payments of US$540,000, delivered quarterly, until a final payment of US$9 million is made prior to the commencement of commercial production.
Importantly, failure to meet these payment obligations will result in the surface and mineral rights reverting to MMV, underscoring the financial discipline required to progress this opportunity. Eagle Mountain will also assume responsibilities for preserving existing infrastructure and maintaining insurance on the property during the option period.
Strategic Context and Future Prospects
This option agreement follows a strategic review completed earlier in 2024, where Eagle Mountain decided against a US$4.5 million payment to extend its rights over Oracle Ridge for 15 years due to unfavorable commercial terms. Instead, the company has opted for this more flexible arrangement, retaining a strategic landholding nearby and valuable geological data from previous exploration.
With Arizona being a hub for copper mining in the United States, home to some of the world’s largest copper deposits, Eagle Mountain’s move positions it well within a competitive and resource-rich environment. The company’s focus on advancing the Wedgetail and Silver Mountain projects complements this acquisition strategy, potentially creating a diversified portfolio of copper-gold assets.
While the agreement marks a positive development, the path to production remains contingent on Eagle Mountain exercising the option and securing the necessary funding to meet payment milestones. The company’s ability to negotiate partnerships and manage financial commitments will be critical in translating this option into a producing asset.
Bottom Line?
Eagle Mountain’s Oracle Ridge option sets the stage for a pivotal test of its strategic and financial resolve in the coming year.
Questions in the middle?
- Will Eagle Mountain exercise the option within the 12-month window?
- How will the company finance the initial and ongoing payments under the agreement?
- What are the prospects for securing joint venture partners to advance Oracle Ridge?