Toronto-listed Copper Mountain Mining has secured a deal to acquire Australian copper aspirant Altona Mining and gain access to the Cloncurry project in Queensland.
The undeveloped Cloncurry prospect, which has a measured and indicated mineral resource containing over 950,000 tonnes of copper and an inferred resource of around 720,000 tonnes, is 100 per cent owned by Altona.
According to the two companies, the deal will create a multi-jurisdictional, mid-tier copper producer with annual production of around 73,000 tonnes of copper by 2020.
The companies plan to combine through a scheme of arrangement where Copper Mountain acquires Altona’s entire share capital in a deal that values the Australian target at $93 million.
The acquisition will be executed through a merger implementation deed, with Altona to propose the scheme that will lead to Copper Mountain acquiring its shares.
Each Altona share will be exchanged for 0.0974 of either a CHESS depositary interest of Copper Mountain, which will trade on the Australian Securities Exchange (ASX), or, if elected, a Copper Mountain share that will be traded on the Toronto Stock Exchange (TSX).
Altona’s shares would be acquired for 17 cents each, a 42 per cent premium on the company’s closing price on November 17.
Copper Mountain chief executive Jim O’Rourke said the company had been patiently evaluating cost competitive opportunities to achieve a step-change in copper production.
“Cloncurry exemplifies the criteria of low-risk, near-term and high quality for which we have been seeking,” O’Rourke said.
“We intend to progress Cloncurry into production with the aim of doubling Copper Mountain’s copper production profile to the range of 170 million pounds (73,000 tonnes) of copper per annum with significant precious metals credits.
“This additional copper production is timely to capitalise on the projected strong copper cycle.”
Copper Mountain’s flagship assets is the 75 per cent owned Copper Mountain open pit mine in British Columbia, Canada.
Altona managing director Alistair Cowden said the company was delighted to join Copper Mountain to a form a high growth copper producer.
“We are excited to bring Copper Mountain’s depth of experience in constructing and operating a large scale open pit copper mine to bear upon the Cloncurry copper project,” Cowden said.
“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.”
The deal is scheduled for completion in the first quarter of 2018.