EMX Royalty Corporation: A Strategic Acquisition in Peru's Copper Belt
Monday, Jan 6, 2025 4:40 pm ET
EMX Royalty Corporation (NYSE American: EMX) (TSXV: EMX) has announced the acquisition of a royalty on the Chapi copper mine property in Peru, further expanding its portfolio of mineral property interests. The acquisition aligns with EMX's strategy of generating stable, inflation-protected income from its royalty portfolio and adds a high-quality asset to its diverse portfolio.

The Chapi Mine, located in southern Peru's Moquegua and Arequipa Departments, has a history of production, with historical, small-scale copper production occurring intermittently from the 1930s to the early 1980s. Between 2006 and 2012, the mine produced approximately 5,000 to 8,500 tonnes per annum of copper, with grades ranging from 0.59% to 1.04% copper. The operations were halted in 2012 due to declining copper prices and operational challenges, but the property has been maintained under care and maintenance with the principal permits for mining operations remaining in place under a temporary suspension.
The deposits at Chapi are comprised of sandstone-hosted copper mineralized mantos, partially oxidized and secondarily enriched, that are related to a series of porphyry intrusions. The Chapi Mine lies between, and directly along trend from, some of the world's largest producing porphyry copper deposits, such as the Toquepala and Cuajone mines. This strategic location increases the likelihood of discovering additional mineralization and extending the mine's life. The presence of porphyry intrusions also indicates that the Chapi Mine could host a significant copper resource, which would enhance its production potential and royalty value.
EMX has acquired a royalty interest of up to 2% of Net Smelter Returns (NSR) on minerals produced from the approximately 26,000-hectare property owned by MPC, as well as up to a 2% NSR royalty from any minerals that are produced from outside the Property Royalty area but that are processed at the Chapi Mine processing facilities. The Agreement also includes a two-kilometer area of interest (AOI) around the Property Royalty area, and any property acquired by MPC within this AOI will also be subject to an NSR royalty of up to 2%. As consideration for the acquisition of the first 1% of the NSR interests, EMX has paid MPC the amount of US$3,000,000. A second 1% NSR interest can be acquired by EMX, at the election of MPC, for an additional US$7,000,000 until February 28, 2025.
The acquisition of the Chapi copper mine royalty is expected to contribute significantly to EMX's overall revenue streams in both the short and long term. The Property Royalty is perpetual and cannot be reduced, ensuring a long-term revenue stream for EMX. The Facilities Royalty and the AOI Royalty will be reduced by half on July 1, 2034, but they will still contribute to EMX's revenue streams for at least 11 years after the restart of the Chapi Mine. The Chapi Mine has excellent upside development and exploration potential, which could lead to increased production and higher royalty payments in the long term.
In conclusion, the acquisition of a royalty on the Chapi copper mine property in Peru is a strategic move for EMX Royalty Corporation. The high-quality asset, located in the prolific Paleocene-Eocene copper-molybdenum porphyry belt of Southern Peru, aligns with EMX's strategy of generating stable, inflation-protected income from its royalty portfolio. The acquisition fits well with EMX's existing royalty portfolio in terms of location, metal, production history, reserves, and exploration upside. The Chapi royalty is expected to contribute significantly to EMX's overall revenue streams in both the short and long term, further enhancing the company's growth and shareholder value.