South African miner Concord Gold (NYSE: HMY; JSE: HAR) is increasing into the coveted copper market with the acquisition of Copper Mountain Mining’s (TSX: CMMC; ASX: C6C) Eva challenge in Australia, in a deal value US$230 million.
The corporate stated the challenge, located in Queensland, provides 1.7 billion lb. of copper and 260,000 oz. of gold to its mineral reserves. It additionally helps Concord Gold take a firmer step into the orange steel, which is taken into account crucial to the worldwide vitality transition.
Till now, the corporate’s solely publicity to copper was by means of its stake within the Wafi-Golpu three way partnership with Newcrest in Papua New Guinea, the place the companions have been ready for a particular mining lease (SML) from the federal government for greater than three years.
The acquisition additionally opens up a brand new income stream for Concord as costs and demand for copper stay robust based mostly on an anticipated provide deficit of the steel within the medium- to long-term.
The Eva open pit copper mine is predicted to yield 100 million kilos of copper a yr and 14,000 ounces of gold yearly over an anticipated mine lifetime of 15 years.
Getting the challenge off the bottom, in keeping with Copper Mountain, would require a $597 million funding, which Concord plans to fund with current money and accessible debt services.
“Buying Eva Copper is strategically vital to our progress journey. It opens a brand new copper/gold frontier for Concord inside a extremely engaging Australian mining space,” Concord CEO Peter Steenkamp within the assertion.
Concord Gold turned South Africa’s largest gold producer final yr after finishing the acquisition of the remaining home property of native rival AngloGold Ashanti (NYSE: AU; ASX: AGG; JSE: ANG).
The corporate expects to shut the cope with Copper Mountain within the first quarter of 2023. Copper Mountain will obtain US$170 million on closing. Concord will even pay out an extra US$30-million in money (10% of incremental income from Eva above the income at a copper value of US$3.80 per lb); and as much as US$30 million based mostly on further copper sources delineated after the asset sale.
Copper Mountain’s flagship asset is the 75% owned Copper Mountain mine positioned in southern B.C., close to the city of Princeton.