World Copper Enters into Letter Agreement for the Acquisition of the Zonia Copper Oxide Project
LC290204-1
NR-21-08 April 20, 2021
World Copper Enters into Letter Agreement for the Acquisition of
the Zonia Copper Oxide Project
FOR IMMEDIATE RELEASE...Vancouver, British Columbia: World Copp er Ltd. (" World
Copper" or the "Company"; TSXV: WCU) is pleased to announce that it has entered into a letter
agreement dated April 13, 2021 (the " Letter Agreement ") with Cardero Resource Corp.
("Cardero"; TSXV: CDU), whereby the Company has agreed to acquire 100% of Cardero's Zonia
copper oxide project located in central Arizona ("Zonia") by way of business combination between
the Company and Cardero (the "Proposed Transaction").
Under the terms of the Proposed Transaction and subject to acce ptance by the TSX Venture
Exchange (the "TSXV"), the Company would acquire all of the outstanding common sha res of
Cardero in consideration of the issuance of common shares of the Company (the "WCU Shares")
to the shareholders of Cardero, such that upon the completion o f the Proposed Transaction the
number of WCU Shares held by former shareholders of Cardero, on a non-diluted basis, will be
40% of the then issued and outstanding WCU Shares with the remaining 60% held by the existing
shareholders of World Copper (the " Exchange Ratio "). The Proposed Transaction involves a
Non-Arm's Length Party (as defined in TSXV Policies) insofar as Hendrik van Alphen, the CEO
and a director of the Company, is also a director of Cardero.
World Copper CEO, Hendrik van Alphen, stated, "We are building a major player in the copper
industry, and the acquisition of Zonia is a large step on that path. World Copper has a fantastic
stable of assets in Escalones and Cristal, but to make our pipeline more complete, we have targeted
Zonia, a late-stage development project that gives the Company a potentially shorter time-line to
production. Copper prices have been buoyant and the global drive to electrification is set to make
copper demand and prices robust for a long time. Therefore, the sooner we can generate cash flow
in this dynamic, the better served shareholders will be. Our i ntent is to push forward with
permitting, engineering and pla nning in the mining-friendly jur isdiction of Arizona, USA to get
Zonia up and running soon. We expect this will help to shift development financing of our Chilean
assets from external to internal sources of capital, thereby mi tigating future shareholder dilution
and building long-term value. The team at World Copper is very excited about this acquisition
and I look forward to providing future updates."
About Zonia
Zonia is located in the Walnut G rove Mining District, Yavapai C ounty, Arizona, and consists of
261 patented (96) and unpatented (185) mineral claims, and 566.85 acres of surface rights acquired
from the State of Arizona, all totaling 4,279.55 acres.
Zonia is a near-surface, copper-oxide resource and a brownfield s site having already been mined
in the late 1960s and '70s. The project has been significantly de-risked with over 50,000 metres of
drilling completed to date and with substantial amounts of detailed engineering completed. Zonia
contains Measured resources of 15.6 million short tons grading 0.43% copper (129.3 million
- 2 -
LC290204-1
pounds of copper), Indicated resou rces of 61.4 million short to ns grading 0.31% copper (380.6
million pounds of copper) and Inferred Resources of 27.2 million short tons grading 0.28% copper
(154.6 million pounds of copper) a t a 0.2% total copper cut-off grade. A preliminary economic
assessment dated April 17, 2018, effective date March 22, 2018 (the "PEA") was prepared by
Global Resource Engineering Ltd., which suggests that the project can be advanced utilizing low-
cost open pit mining and heap leach with SX-EW processing to pr oduce pure copper cathode (a
copy of the PEA technical report is available on Cardero's SEDAR profile at www.sedar.com).
Zonia was pre-stripped during mining in the late 1960s and 1970s so that, as described in the PEA,
the strip ratio is a low 1:1. Furthermore, GRE outlines a mine plan and development strategy
entirely on private land, which significantly reduces the timeline for permitting. At a copper price
of $3.00/lb, Zonia shows an after-tax NPV@6% of $225 million, and an IRR of 29.0%.
The PEA is preliminary in nature, it includes inferred mineral resources that are considered too
speculative geologically to have the economic considerations ap plied to them that would enable
them to be categorized as mineral reserves, and, as such, there is no certainty that the PEA results
will be realized. Mineral resources are not mineral reserves a nd do not have demonstrated
economic viability as there is no certainty that all or any par t of the resources will be converted
into reserves.
In addition to the established resource, the Zonia land positio n contains a copper-molybdenum
geochemical anomaly (associated w ith depressed manganese values ) that is similar in intensity
and scale (1000 by 1500 metres) to the main resource, and withi n the same prospective geology.
This anomaly is located two kilo meters northeast of the resourc e and represents a high-priority
copper-oxide porphyry exploration drill target.
Summary of the Transaction
It is currently anticipated tha t the Proposed Transaction will be completed by way of a plan of
arrangement, however, the structure of the Proposed Transaction remains subject to negotiations
between the parties and may be altered for tax, corporate, secu rities or regulatory reasons. The
parties have agreed to negotiate in good faith a formal definit ive agreement (the " Definitive
Agreement") which will contain representations, warranties and condition s of each party
customary in transactions of this nature.
Under the terms of the Letter Agreement, the parties have agreed to the following principal terms
for the Proposed Transaction:
all outstanding warrants of Cardero not exercised by the holders thereof prior to the
closing of the Proposed Transaction will be exercisable into WC U Shares in
accordance with and subject to adjustment (as to number and exercise price) using
the Exchange Ratio, the Consolid ation (as defined below) and th e rules of the
TSXV;
Cardero will have the right to appoint two members to the board of directors of the
resulting entity;
World Copper will assume certain debts of Cardero consisting of (i) approximately
$2,329,163 in loans owed to a controlling shareholder of Carder o and/or entities
related to it (collectively, the " Creditor Entities"), including interest accruing at
- 3 -
LC290204-1
12% per annum; and (ii) approxi mately $1,019,836 in outstanding dividends on
preferred shares in the capital of Cardero, formerly held by th e Creditor Entities;
and
concurrently with the closing of the Proposed Transaction (or p rior to the first
anniversary thereof), World Copper will conduct a financing or financings, the
aggregate gross proceeds of which, when combined with the gross proceeds from
the exercise of certain warrants to be issued to the Creditor E ntities in connection
with the Proposed Transaction, shall be at least $10,000,000 (t he "Private
Placement"), on the terms and at such price as World Copper may determine. The
net proceeds from the Private Placement are expected to be used in connection with
drilling programs on the Company's Escalones and Cristal projec ts, the details of
which will follow in a subsequent news release, and for general working capital
purposes.
Completion of the Proposed Transa ction will be subject to the s atisfaction of various conditions
precedent, including: (i) the receipt of all necessary regulat ory approvals, authorizations and
consents, including acceptance for filing of the Proposed Transaction by the TSXV; (ii) receipt of
all necessary corporate and shareholder approvals by the partie s; and (iii) there being no material
adverse change in the business or operations of any of the parties from the execution of the Letter
Agreement by the parties until the closing of the Proposed Transaction.
Subject to applicable regulatory and TSXV acceptance, the Compa ny may pay finder's fees to
certain finders in an amount to be agreed to by the parties.
A subsequent news release will be disseminated when additional details regarding the Proposed
Transaction are available.
Consolidation
In connection with the Proposed Transaction, the Company also a nnounces that it intends to
consolidate its issued and outstanding WCU Shares (the "Consolidation") in an amount of one (1)
post-Consolidation WCU Share for every three (3) pre-Consolidat ion WCU Shares. Further
details about the Consolidation, including the anticipated trad ing date for the post-Consolidation
WCU Shares and new CUSIP and ISIN numbers, will be announced in a subsequent news release.
The Company believes that the Consolidation will provide the Co mpany with greater flexibility
for the continued development of its business and the growth of the Company, including possible
financing arrangements.
Additional Information
Additional information about the Company or Cardero is available under their respective SEDAR
profile available at www.sedar.com.
Qualified Person
John Drobe, P.Geo., a qualified person as defined by NI 43-101, has reviewed the scientific and
technical information that forms t he basis for this news releas e and has approved the disclosure
herein. Mr. Drobe is not independent of the Company as he is a consultant of World Copper.
- 4 -
LC290204-1
ABOUT WORLD COPPER LTD.
World Copper Ltd., headquartered in Vancouver, BC, is a Canadia n resource company focused
the exploration and development of its two primary copper porph yry projects, Escalones and
Cristal, both located in Chile. World Copper has laid claim to five copper porphyry targets, one
with estimated resources, signi ficant soluble copper mineraliza tion, and exciting potential to
expand the resource base.
Escalones has estimated resources of 185 million tonnes of 0.33% copper (0.37% CuEq) Indicated
and 254 million tonnes of 0.39% copper (0.43% CuEq) Inferred, based on nearly 25,000m of drill
core from 53 holes. In additi on, three significant hydrothermal alteration zones, each measuring
between 2,000m and 3,000m in diameter, lie 8-10km to the north of the main discovery.
Mineral resources are not mineral reserves and do not have demo nstrated economic viability as
there is no certainty that all or any part of the resources wil l be converted into reserves. Inferred
resources are that part of a mineral resource for which quantity and grade or quality are estimated
on the basis of limited geological evidence and sampling. It i s reasonably expected that the
inferred resources could be upgraded to indicated resources with continued exploration.
The World Copper team has a unique skill in navigating the mining sector within Chile, with some
members having worked in the country for more than 40 years and with discovery success.
On Behalf of the Board of Directors of
WORLD COPPER LTD.
"Hendrik van Alphen"
Hendrik van Alphen
Chief Executive Officer
For further information, or to schedule a Zoom meeting with Management, please contact:
Henk van Alphen or Michael Pound
Phone: 604-638-3665
E-mail: [email protected]
Follow us:
Twitter: https://twitter.com/WorldCopperLtd
Facebook: https://www.facebook.com/WorldCopperLtd
LinkedIn: https://www.linkedin.com/company/worldcopperltd
Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this news release.
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (collectively, "forward-
looking statements") within the meaning of applicable Canadian and U.S. securities legislation, including the United
States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact,
included herein including, without limitation, the Company's expectation that it and Cardero will be able to complete
- 5 -
LC290204-1
the Proposed Transaction, including entering into a De finitive Agreement, the closing and amount of the Private
Placement, that Zonia can be advanced utilizing low-cost open pit mining and heap leach, the results of the PEA,
including, without limitation the NPV6%, IRR, estimated costs, average rate of production, the anticipated exploration
program results from exploration activities and the anticipated business plans and timing of future activities of the
Company, including the timing for the closing of the Proposed Transaction and the expected drilling programs at
Escalones and Cristal, are forward-lo oking statements. Althou gh the Company believes that such statements are
reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are
typically identified by words such as: "believes", "expects", "anticipates", "intends", "e stimates", "plans", "may",
"should", "would", "will", "potential", "scheduled" or variations of such words and phrases and similar expressions,
which, by their nature, refer to future events or results that may, could, would, might or will occur or be taken or
achieved. In making the forward-looking statements in this news release, the Company has applied several material
assumptions, including without limitation, that it will be able to negotiate and enter into a Definitive Agreement, and
that it will obtain TSXV acceptance and the required corporate approvals of the Proposed Transaction and the
Consolidation, that there will be investor interest in the Private Placement, market fundamentals will result in
sustained copper and precious metals demand and prices, the receipt of any necessary permits, licenses and regulatory
approvals in connection with the future development of the Company's projects in a timely manner, the availability of
financing on suitable terms for the development, construction and continued operation of such projects and the ability
to comply with environmental, health and safety laws.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to differ materially from any future results, performance
or achievements expressed or implied by the forward-looking information. Such risks and other factors include,
among others, requirements for additional capital, actual results of exploration activities, including on Escalones and
Cristal, the reasonability of the economic assumptions at the basis of the results of the PEA for Zonia, the estimation
or realization of mineral reserves and mineral resources, future prices of copper, changes in general economic
conditions, changes in the financial markets and in the demand and market price for commodities, lack of investor
interest in the Private Placement, accidents, labour disputes and other risks of the mining industry, delays in obtaining
governmental approvals (including acceptance of the Proposed Transaction, the Private Placement and the
Consolidation by the TSXV), permits or financing or in the completion of development or construction activities, risks
relating to epidemics or pandemics such as COVID-19, including the impact of COVID-19 on the Company's business,
financial condition and results of operations, changes in la ws, regulations and policies affecting mining operations,
title disputes, the timing and possible outcome of any pending litigation, environmental issues and liabilities, as well
as the risk factors described in the Company's annual and quarterly management's discussion and analysis and in
other filings made by the Company with Canadian securities regulatory authorities under the Company's profile at
www.sedar.com.
Readers are cautioned not to place undue reliance on forward-looking statements. The Company undertakes no
obligation to update any of the forward-looking statements in this news release or incorporated by reference herein,
except as otherwise required by law.