Perth-based Exco Resources says it will offload its Cloncurry copper project in Queensland to international mining giant Xstrata for $175 million.
The proposal is subject to a number of conditions, including shareholder approval and Xstrata receiving approval from the foreign investments review board.
At 12:45PM today (WST), Exco shares had jumped 11.2 per cent, to trade at 69 cents.
Exco said following completion of the sale, it would hold approximately $220 million in cash and be fully funded to undertake a major drilling program at its Hazel Creek copper-gold project.
The Exco board said it also intended to distribute up to $100 million in surplus funds to shareholders.
Exco Managing Director, Michael Anderson said completion of the sale would be a transformational event for the company.
"The company has been very focused on growing the Cloncurry Copper Project and the proposed sale to Xstrata will provide a substantial return on investment for the benefit of all shareholders.
"The proposal will enhance Exco's ability to focus on growing its continuing asset base and reviewing and implementing an appropriate acquisitions strategy."
Exco said it would issue a notice of meeting to seek shareholder approval shortly.
