Culico and Kharrouba merge, create Morocco-focused copper company

Culico Metals (TSX-V:CLCO) has entered into a definitive agreement to merge with Kharrouba Copper Company (KCC) in a deal that creates a copper mining and exploration company focused on Morocco.

The transaction, structured as a plan of arrangement under the Business Corporations Act (Ontario), will see KCC shareholders receive 0.389 Culico shares for each KCC share held.

Upon completion, existing Culico and KCC shareholders will own roughly 44% and 56% of the combined company, respectively, on a fully diluted basis. The transaction gives the combined business an implied market capitalisation of approximately C$121 million ($121.45 million).

The combined company expects to have access to approximately US$3.8 million ($5.26 million) in gross proceeds from a concurrent KCC financing, along with roughly US$16.1 million in cash and available liquidity pro forma the merger.

Current Culico CEO Paul Andre Huet will serve as executive chairman, KCC founder Scott Hand as vice chairman, Frank Marzoli as president, and Carl Gernandt as chief financial officer.

“Since our inception in 2024, we’ve diligently reviewed numerous opportunities in pursuit of building Culico into a premier base metals-focused company,” Huet says.

“Today, we are thrilled to announce our proposed merger with KCC which controls highly prospective high-grade copper exploration and development properties across a large 158km² land package in Morocco.”

Hand says Culico’s investment confirms the significant prospects KCC sees going forward.

“Our land position is extensive, the work done to date in exploration, in mining, and in processing our copper ores; and also copper, gold, and antimony ores from third parties offer great opportunities for the company and our shareholders,” Hand says.

“Our experience in Morocco has been exceptionally positive, supported by the strong partnership and commitment of the Government of the Kingdom of Morocco and the availability of highly skilled mining, processing, and exploration professionals.”

The assets include the Kharrouba Complex and Koudiat El Harcha properties, where less than 10% of the land package has been explored.

At Koudiat El Harcha, the Aouinet Feddah target features a 4km shear zone with copper-rich quartz veins displaying 15–25% copper mineralisation across 3–5m widths. A 1,400-tonne bulk sample suggests potential for 1–2% copper (Cu) over 5–10m widths, with Kharrouba boasting historical production average grades of 1–3% Cu.

“We’ve watched the KCC team make substantial progress at the Kharrouba Complex since our initial investment in 2025,” Huet says.

“In particular, the KCC team has developed the mine and processing facility into a compelling cash flow opportunity with the potential to fund future exploration activities.

“We are excited to pair KCC’s excellent team and highly prospective land package with Culico’s strong capitalization and management team.”

The merger requires approval from at least 66⅔% of KCC shareholders and a simple majority of Culico shareholders. Both boards unanimously recommend the transaction, backed by an independent fairness opinion provided to KCC by Blair Franklin Capital Partners.

Culico Metals is focused on creating value in the mineral exploration, development, and production sectors, with an estimated 8% equity interest in KCC; common shares of Americas Gold and Silver (NYSEAMERICAN:USAS), a 1% lithium royalty on certain mining interests held by Kali Metals (ASX: KM1) and the right to receive a deferred consideration payment from the on-sale of the Dumont Project.

Write to Paula Fabe at Mining.com.au

Images: Kharrouba Copper Company

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