Aditay Birla has announced it will sell the Mount Gordon copper mine to Lighthouse Minerals.
According to Aditya the sale represents the culmination of a strategic review over all of its operations.
Aditay Birla managing director Neel Patnaik stated that the sale represents the efforts of the company and ANZ Corporate Advisory over the last two years, since the mine was placed under care and maintenance.
While the operation itself is only being offloaded for around $15 million, $10 million of which is reliant on the three month delivery quoted price for copper on the London Metals Exchanges averages at least $4.20 per pound over any continuous six month period starting from the first day of commercial production at the mine through to 36 months after the this date.
Copper has been relatively stable over the last few months, although it shot to an eight week high late last week after copper mines in Chile halted production following a massive 8.3 magnitude earthquake.
While operations were not damaged, “It just reminded people of potential supply bottlenecks, be it in the way of quakes, floods or poor ore grades,” Edward Meir, an analyst at INTL FCStone Inc. in New York told Bloomberg.
The price rose to US$2.45 per pound (AUD$3.405)
However, most importantly for Aditya the sale is believed to free up around $41.7 million worth of cash tied up in environmental and performance bonds.
Following the sale Aditya will continue to operate its Nifty mine, and review the Maroochydore project.