Goldgroup Mining has committed US$75 million to Luca Mining Corp. as part of Luca’s US$110 million private placement. The proceeds will help fund Luca’s acquisition of the Cozamin copper-silver mine in Mexico from Capstone Copper. Upon completion, Goldgroup is expected to hold approximately 19.9% of Luca.
The investment gives Goldgroup the right to nominate two directors to Luca’s board. That right will remain in place as long as Goldgroup holds at least 10% of Luca.
Goldgroup plans to fund the investment from its cash reserves, recently increased by a US$121.8 million private placement. Its commitment replaces a previous US$75 million equity backstop provided to Luca by Trafigura.