Altona agrees to buyout
ALTONA Mining will agree to a $93m buyout from Canadian-based Copper Mountain Mining (CMMC), following a failed joint venture (JV) to develop its Cloncurry copper project with Chinese-run infrastructure business Sichuan Railway Investment Group (SRIG).
The undeveloped Cloncurry deposit, 95km northeast of Mt Isa in QLD, could produce 39,000 tonnes (t) of copper and 17,200 ounces (oz) of gold per annum across a minimum 14 year mine life.
SRIG failed to obtain necessary approvals for the development, and subsequently the deal went bust in July last year, leaving Altona open to offers on the project.
Speaking to The Australian Mining Review in September, Altona managing director Dr Alistair Cowden said the company was open to agreements for the development of Cloncurry.
“We are now seeking to get value for our shareholders,” Dr Cowden said.
“We are open to partnerships, asset sales or corporate deals, whichever generates the best return to our shareholders.”
By late November, Altona had agreed and executed an all-in scrip deal to be bought out by CMMC at 17 cents per share, representing a 41.7 per cent premium to Altona’s last closing price before the offer.
Altona would become a wholly owned subsidiary of CMMC.
CMMC said that if the deal comes to fruition, it would target production by 2020 and likely fund the $US217 million capital expenditure for development of the mine via debt facilities and working capital.
“For some time, CMMC has patiently been evaluating cost competitive opportunities to achieve a step-change in copper production,” CMMC chief executive Jim O’Rourke said.
“Cloncurry exemplifies the criteria of low-risk, near-term and high quality for which we have been seeking.
“We intend to progress Cloncurry into production with the aim of doubling CMMC’s copper production profile to the range of 160 million pounds (73,000 tonnes) of copper per annum with significant precious metals credits.
“This additional copper production is timely to capitalize on the projected strong copper cycle.”
Dr Cowden said CMMC’s depth of experience in constructing and operating large open-pit copper mines would be essential to bring Cloncurry to life.
“Altona’s shareholders will receive a premium and will also gain immediate exposure to copper production just as copper prices have recovered and market shortfalls are predicted over the near term,” Dr Cowden said.
“This is a great opportunity for our shareholders to participate in the creation of a leading midsized copper producer.”
The undeveloped Cloncurry project could give CMMC a global copper production footprint.