KGHM International, a fully owned subsidiary of KGHM Polska Miedź, has signed an agreement with Vale Canada for the development of the Victoria project as well as the ore off-take to the mining company’s processing facilities in Sudbury, Canada.
Under the new deal, KGHM will build and operate the Victoria project as the sole owner of the project and Vale will receive a royalty and off-take on all future output from the project.
In addition, the two companies re-negotiated the off-take arrangement for all of KGHM’s production from its mines in the Sudbury Basin.
As per the terms of the deal, Vale will buy polymetallic ore from KGHM and processes it at its Clarabelle mill in Sudbury. The deal is valid for the full life of all KGHM’s Sudbury mines, including future production from Victoria.
KGHM International president and chief executive officer Derek White said that the new agreement lays the foundation for the development of the Victoria project and KGHM International’s expanding presence in the region.
"This project will not only create significant value for the KGHM group, but also for Vale as the offtaker," White added.
KGHM said it will continue to progress towards approval and granting of the necessary approvals, arrangements with First Nations, as well as prepare for infrastructure construction and shaft development in the second half of this year.