Al­tona agrees to buy­out

The Australian Mining Review - - NEWS - CAMERON DRUMMOND QLD

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.

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