CHINESE investment has sealed the deal for almost 300 jobs in the North West at one of the largest undeveloped copper projects in Australia.
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Major Chinese construction firm Sichuan Railway Investment Group will contribute US$214 million cash to transition Altona Mining’s Cloncurry Project into production.
Altona Mining Ltd has signed off a binding framework agreement for SRIG to hold a 60 per cent stake and fund the project to production.
Altona will contribute the Cloncurry Project and pile in US$38 million to hold the remaining 40 per cent for the joint venture to develop a mine at Little Eva, situated within the Cloncurry Project.
A definitive feasibility study announced by Altona last year for the Little Eva development anticipated the construction of a 7 million tonne-a-year open-pit mine and flotation plant capable of producing 39,000 tonnes a year of copper and 17,000 ounces of gold.
Altona Mining managing director Alistair Cowden said:
“Once the project is in production it will sustain about 280 new direct jobs and Altona’s 40 per cent interest will equate to 17,000 tonnes of copper equivalent production.
“We are delighted to announce this major partnership on the Cloncurry Project with SRIG.”
“The contribution to be made by SRIG is based on an agreed value for the project of US$105 million which clearly exceeds that implied by the company’s share price.
“On completion of the transaction, the project will be fully funded to production without recourse to equity or debt markets. The joint venture will have US$252 million in cash plus the Cloncurry Project which is valued at US$105 million by the proposed transaction.’’
Dr Cowden said the company preferred to source local workers for the open-pit mining project.
He said more work would be undertaken to re-evaluate the project and potentially amend the mine plan and grow production.
Altona recently announced its newly discovered Turkey Creek deposit – nearby, its Little Eva deposit would add another two years’ mine life to the already estimated 11 years’ life for the Cloncurry Project.
SRIG is based in Chengdu in south-western China and is 100 per cent owned by the Sichuan provincial government. The group’s principal businesses are in the road, bridge and rail construction and management sectors and had total assets of US$26.8 billion in 2014.
There was speculation that Chinese-owned MMG would acquire Altona’s Cloncurry Project to make its nearby Dugald River project more economically viable because of its existing infrastructure base. The deal would’ve likely shored up Dugald River, one of the world’s largest and highest-grade known undeveloped deposits of zinc, lead and silver.
Dugald River, about 65 kilometres north-west of Cloncurry and 85 kilometres north-east of Mount Isa, has a projected mine life of more than 20 years and would employ about 500 direct employees and contractors once operational.
Insiders remain confident the imminent decision by MMG will give the green light for production at Dugald River.