Xstrata has entered an agreement with Exco Resources Limited to acquire two copper tenements in north west Queensland for $175 million to expand production at its Ernest Henry Operation.
The deal is waiting finalisation, dependant on Exco shareholder approval, following an endorsement from the Exco board.
The E1 and Monakaff tenements being acquired by Xstrata are located eight kilometres 21 kilometres away from the Henry processing facilities and contain open pit copper mineral resources which have passed feasibility studies.
Xstrata say the production from these deposits would make an “incremental contribution” to Ernest Henry’s production profile from the second half of next year.
Ore will be transported from the E1 and Monakoff projects to Ernest Henry and processed through the operation’s existing concentrator.
Xstrata Copper North Queensland Division Chief Operating Officer said operations are on track.
“Ernest Henry’s open pit operations are scheduled to finish later this year and we are currently in the process of transforming the site into a major underground mining operation associated magnetite extraction plant.
“The E1 and Monakoff copper projects offer an attractive opportunity to expand Ernest Henry’s expected production profile by utilising the remaining capacity of the Ernest Henry concentrator while leveraging other significant synergies available through our existing site infrastructure, equipment and workforce.
“We anticipate that the development and operation of the E1 and Monakoff copper projects will create around 100 full-time jobs, some of which will be sourced from Ernest Henry’s existing open pit workforce.”