Glencore has agreed on the sale of its Ernest Henry Mining copper-gold mine at Cloncurry to Australian-owned Evolution Mining for a billion dollars.
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Evolution told the ASX Wednesday the Ernest Henry deal would comprise of $800 million payable upfront on transaction completion on January 6, 2022, and $200 million payable on the first anniversary.
Glencore will continue to treat Ernest Henry product at its Mount Isa smelter.
Evolution acquired an economic interest in Ernest Henry in 2016 via a joint venture structure with the asset managed and operated by Glencore.
Under the Transaction, the JV will expire, and Evolution will receive 100% ownership and operatorship of the asset.
Evolution said the transaction would result in Evolution's copper production increasing, cementing its position as one of the lowest cost gold producers in the world.
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Evolution's Executive Chairman Jake Klein said they had long coveted to own Ernest Henry.
"It is a world-class asset in Australia and one which we know extremely well due to our successful investment in the asset in 2016 and proud that it will once again be 100% Australian owned," Mr Klein said.
"The acquisition is consistent with our strategy, materially improves the quality of our portfolio and delivers both strong cash flow and mine life extension opportunities. The site management team have an outstanding track record of operational delivery and we are delighted they will be joining Evolution and look forward to working with them to make this an even better operation. We are also pleased to be continuing our strong relationship with Glencore and that the product will continue to be treated in the local region at their Mount Isa smelter and Townsville refinery."
Glencore said it had reached a deal to offtake all Ernest Henry copper concentrate and would continue to be among Australia's leading producers and exporters of green metals while increasing focus on other lower-cost, long-life copper assets, such as those in Africa and South America.
Ernest Henry is a large-scale, long-life, copper-gold mine located 38km north-east of Cloncurry.
The operation commenced as an open pit mine in 1998 and transitioned to underground mining in 2011. The current shaft underground mining operation employs a low-cost and highly efficient sub-level caving ore extraction method. There is also an underground primary crusher and ore handling system. Ore is brought to surface via a 1km shaft with a hoisting capacity in excess of 6Mt per annum. The operation also has an effective and sophisticated above and below ground water management system.
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