Altona finalises Cloncurry JV arrangement

Perth-based Altona Mining has finalised terms for a joint venture arrangement at its Cloncurry copper-gold project in Queensland, with the partner to contribute $US213.5 million ($A295 million) to acquire a majority stake.

Chinese construction business Sichuan Railway Investment Group will hold a 66 per cent stake in the joint venture, to be named Roseby Copper, with Altona to own the remaining 34 per cent.

The agreement, which was signed by both companies today, follows ongoing negotiations between Altona and SRIG since June last year.

Amendments to the initial agreement include a reduced cash contribution requirement by Altona, from $US38 million to $US25 million, at a cost of the company reducing its stake in the joint venture from 40 per cent to 34 per cent.

SRIG’s required investment has increased by $US1 million under the final agreement, with its stake increased by 6 per cent.

The joint venture plans to develop a 7 million tonne per annum open-pit mine and flotation plant at Cloncurry, which would be capable of producing 39,000 tonnes of copper per annum and 17 ounces of gold over an initial 11-year mine life.

“Altona’s 34 per cent interest will equate to about 15,000t of copper equivalent production which will generate significant cashflow,” Altona managing director Alistair Cowden said.

“This financing structure delivers higher and more immediate returns to Altona shareholders compared to conventional debt/equity mining project financing structures.

“We have chosen to dilute at the project level, not at the company level.

“The project is significant for Queensland bringing about 300 construction jobs and when in production it will sustain about 280 new direct jobs.”

The companies expect remaining approvals and conditions to be satisfied by the end of October.

Altona shares were 8.3 per cent higher to 13 cents each at 11am.