Carbine signs Mt Morgan offtake deal

Perth-based explorer Carbine Resources has signed an offtake agreement with a chemical and mineral supplier for copper sulphate from its $63 million Mount Morgan project.

In a statement, Carbine said the agreement with Brisbane-based Swancorp would generate about $8 million in revenue per annum, with Swancorp to purchase up to 1,200 tonnes of copper sulphate per annum from Mt Morgan over an initial three-year period.

The offtake deal will provide Carbine with a by-product revenue stream for Mt Morgan, with gold being the primary commodity.

The company said the deal would reduce C1 cash costs for copper operation at Mt Morgan by 27 per cent to $US494 per ounce.

“Combining the expected earnings generated from both copper sulphate and the recently announced pyrite offtake, the C1 cash costs for the operations are reduced by 89 per cent to $US75/oz,” Carbine said.

“The projected all-in sustaining costs for the project remain at $US234/oz.”

The contract also has potential for an extension to 5,000tpa.

Last year, a pre-feasibility study on Mt Morgan, conducted by GR Engineering Services, found the project to be viable at an all-in sustaining cost of $311/oz over a minimum eight year mine life.

Carbine shares gained 12.3 per cent to 6.4 cents each at 11am.