The companies have also entered into life of mine copper and zinc concentrate offtake agreements pertaining to the VMS project

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Falco Resources gets Glencore's backing for its Horne 5 Project. (Credit: aymane jdidi from Pixabay)

Falco Resources has secured $10m funding commitment from Glencore Canada and its affiliated companies for its flagship Horne 5 project, a volcanogenic massive sulphide (VMS) deposit in Québec, Canada.

The bridge financing from Glencore will be made in the form of senior secured convertible debenture, said the Canadian exploration-stage company.

Falco Resources also issued over 12 million of its common share purchase warrants to Glencore as part of the deal.

Apart from the funding deal, Falco Resources has entered into life of mine copper and zinc concentrate offtake agreements with Glencore pertaining to the project located in Rouyn-Noranda.

The copper concentrate extracted from the Horne 5 project will be processed at the nearby Glencore’s Horne Smelter.

Falco Resources 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 towards a Principal Operating License and Indemnity Agreement and commencing dewatering.”

Brief details of the Horne 5 project

According to Falco Resources, the Horne 5 project encompasses the previously producing Horne VMS mine, the Quemont gold and copper mine, and also the Horne 5 deposit.

The pre-production construction costs for the VMS project are estimated by the company at $801.7m.

The Horne mine was operated from 1927 to 1976 by Noranda (now Glencore Canada). It had produced 11.6 million ounces of gold along with 2.5 billion pounds of copper from the mine.

Glencore copper metallurgical operations global head Marc Bédard said: “We are pleased to enter into these agreements in order to further align our interests with Falco.

“While there remains significant work to be done and challenges to be addressed, Glencore Canada is committed to working with all stakeholders towards 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 towards the electrification of transportation.”

Falco Resources’ shareholders include Osisko Gold Royalties (18.3%), and the Québec government (5%) among others.