ArcWest shares jump on Freeport earn-in deal as majors eye BC copper

Shares in junior explorer ArcWest Exploration (TSXV: AWX) jumped more than 80% in morning trading in Toronto after it announced an earn-in deal with Freeport-McMoRan (NYSE: FCX) on one of its copper-gold properties in B.C.’s Golden Triangle.

Under the agreement, Freeport will be able to earn up to 80% of ArcWest’s Todd Creek project which is next to Newcrest Mining’s (TSX: NCM; ASX: NCM) Brucejack mine. To earn an initial 51% interest, Freeport needs to fund $20 million of work at ArcWest over five years, and make staged payments to the company totalling $900,000. ArcWest will remain operator during this stage.

Once it earns its initial stake, Freeport can up its interest to 80% by funding $30 million in work at Todd Creek over five years and making staged payments totalling $750,000.

After Freeport has finalized its ownership level (whether at 51% or 80%), each party will be responsible for funding its proportionate share of work at Todd Creek.

ArcWest believes the project, which it says covers one of the fundamental north-south structural corridors in the Stikine terrane and is near multiple major projects and mines, could be an analogue to the Hod Maden gold-copper project in Turkey.

“ArcWest looks forward to advancing our Todd Creek project in partnership with Freeport, one of the world’s largest copper miners and a team with a track record of global copper-gold discoveries that have proceeded to mine development,” said Tyler Ruks, president and CEO of ArcWest, in a release. “ArcWest’s Todd Creek project is host to one of the largest underexplored copper-gold systems in B.C.’s Golden Triangle, and Freeport’s endorsement of the project is a testament to its potential for hosting a world class copper-gold deposit.”

Ruks added that ArcWest is in discussions with other mining companies on potential earn-in agreements for its other copper-gold porphyry projects. The company has seven in B.C.

ArcWest isn’t the only B.C. junior to attract the attention of copper majors recently.

Amarc Resources (TSXV: AHR; US-OTC: AXREF), which already had a strategic exploration partnership with Freeport at its JOY project, also signed a deal with Sweden’s Boliden in November for its DUKE copper-gold district in the Babine region of B.C.

ArcWest shares reached a new 52-week high of 10¢, up 82% or 4.5¢, at noon E.T. in Toronto. The stock has traded between 5¢ and 10¢ over the last year and has a market cap of $7.6 million.