22/06/2004 - 22:00

Avon’s $25 million play

22/06/2004 - 22:00

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Avon’s $25 million play

Avon’s $25 million play

 

Avon Resources has announced a $25 million four way deal that will allow it to wrap up highly prospective oxide copper tenements near Mount Isa in Western Queensland.

It has bought the sublease in the Lady Anne copper project in the highly-prospective McNamara Group from Robert Champion de Crespigny’s Buka Minerals.

Avon’s major shareholder Mineral Securities is listed as a supporter of the deal.

Avon Resources will change its name to CopperCo Limited and former Straits Resources chief executive Brian Rear has been appointed to oversee the company’s copper development strategy.

Mr Rear was a founder of and led Straits Resources through its acquisition and development of the Girilambone copper project in New South Wales and later the Nifty copper mine.

Avon has also announced the purchase of all of the issued capital of two other companies – Savannah Resources, a 100 per cent owned subsidiary of International Base Metals and Reefway Pty Ltd, which is majority owned by Pegmont Mines Ltd.

Savannah and Reefway own a large tenement package adjoining the Lady Annie resource.

Avon will seek to raise about $11 million through a combination of equity and mezzanine debt.

The company is in discussions with financiers to secure up to $5 million in feasibility debt funding. It also plans to conduct a $6 million capital raising with the intention to give Avon shareholders a $3 million preferred allocation in the proposed raising.

Avon Resources and Mineral Securities chairman Keith Liddell said the acquisitions come at a time when world copper supply and demand fundamentals looked favourable to new projects.

"The Lady Annie ground is big enough to be viable as a stand alone operation. However, including the associated acquisition means Avon Resources has consolidated about 1,500 square kilometres of known copper resource and mineralisation, making the company a major landholder in the Mt Isa belt," he said.

"This will provide Avon with the ability to develop a significant number of mining operations close to each other, furthering our goal to become a significant player in the Australian copper scene."

Avon plans to complete a feasibility study into producing a minimum 15,000 tonnes a year of copper cathode with a view to beginning production in mid 2006 – subject to the success of the feasibility study.

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