Glencore sells another copper mine

Comet Resources is raising $50 million to cover restart and acquisition costs for Glencore’s Queensland Mt Margaret Copper project, which has been out of action since 2014.

The parties announced they had entered a binding agreement for Comet to acquire 100 per cent interest in Mt Margaret Copper Project and associated regional tenements from Glencore subsidiary Mount Isa Mines.

Mt Margaret was put on care and maintenance by Glencore in 2014 on account of lower copper prices and outlook at the time, however, new demand for ‘forward-facing’ metal has since rejuvenated interest.

Comet will acquire 100 per cent of shares in Minerals Mining and Metallurgy (MMM) and Mount Margaret Mining (MTM) - the owners of the Project -  in exchange for 98.55 million shares at 20 cents apiece.

Total consideration for the deal is approximately $19.71 million.

To fund the deal and pre-development activities, Comet has brought on Euroz Hartleys to raise $50 million by offering company shares at 20 cents each.

The majority of the proceeds would be chewed up in covering environmental bond requirements, which are currently assessed at approximately $32.2 million.

Comet says the asset, which touts a 13.0 million tonne at 0.78 per cent copper and 0.24 grams per tonne gold mineral resource, has near-term production potential with two open pits already pre-stripped.

“Acquisition of the Mt Margaret Copper Project is a truly transformational event for Comet,” Comet managing director Matthew O'Kane said.

“Mt Margaret is a substantial past-producing copper mine that we’ve been able to acquire due to portfolio rationalisation of a global tier one mining company.”

The deal comes just weeks after Glencore revealed it would be selling its CSA copper mine in New South Wales to Metals Acquisition Corp (MAC) for $US1.1 billion.