TORONTO (miningweekly.com) – Canadian base metals project developer Duluth Metals on Thursday gained a controlling interest in its flagship Twin Metals Minnesota (TMM) copper/nickel/platinum-group metals project, after joint venture (JV) partner Antofagasta formally issued a ‘25% option termination notice’.

Toronto-based Duluth said with the notice in hand, the JV immediately moved to the ‘40/60 phase’, during which Duluth had 180 days to buy Antofagasta’s 40% interest at a price equal to its sunk costs. This was estimated to total about $220-million, as well as about $10-million currently outstanding under the bridge loan.

Duluth assumed immediate control and operator status of the TMM project.

Under the 2010 participation agreement between the two partners, Antofagasta had the right to buy a further 25% of the TMM project after it had spent $130-million over three years.

"Despite our belief that TMM and the Duluth Complex have potential long-term geological attractions, we have taken the decision to terminate our option to acquire an additional 25% of TMM now that the prefeasibility study is nearing its completion and due to elements of the participation agreement. Our focus is on prioritising projects with the highest value and lowest risks within our portfolio," Antofagasta CEO Diego Hernandez said.

Antofagasta currently owns 10.35% of Duluth and said it was now evaluating its options regarding its continued 40% interest in the TMM and its direct shareholding in Duluth.

Should Duluth not exercise its right to buy Antofagasta’s interest in the TMM project, Duluth would need to repay the $10-million bridge loan, including accrued and unpaid interest in either cash or Duluth shares.

Further, as a result of Antofagasta’s decision not to exercise its 25% option, governance changes took effect, with Duluth now having three members and Antofagasta having two members on both the TMM board and the TMM technical committee.

Duluth said it intended to publish highlights of the AMEC National Instrument 43-101-compliant prefeasibility technical report on TMM by the end of the month.

Duluth’s TSX-listed stock on Thursday closed 13.64% lower at C$0.57 apiece.