Glencore have sold a third major copper mine in recent months and the second in North West Queensland.
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Following the $1 billion sale of Ernest Henry Mine in Cloncurry to Evolution and the $1.1b sale of CSA mine in Cobar NSW to Metals Acquisition, Glencore has now agreed to sell its closed Mt Margaret operation near Cloncurry to Comet Resources for $10m in cash and shares.
Glencore, then called Xstrata, bought the mine in 2011 for $175 million with plans to invest a further $124 million in the open pit operation over the next five years, designated as satellite operations to Ernest Henry Mine.
Mt Margaret was located only 7km from key processing infrastructure at Ernest Henry, where Mt Margaret ore was previously processed into export quality copper concentrate.
However with the copper price tanking in the mid 2010s, the Swiss multinational company closed the mine in 2014 to "reduce mining costs and improve processing outcomes" affecting around 150 employees and 140 contractors.
With the copper price now soaring due to its use in renewable technologies, the mine has become an attractive prospect again.
Comet said it had JORC open-pit Resources of 13.0Mt at 0.78% copper and 0.24g/t gold and had near-term production potential with open-pit deposits already pre-stripped.
Comet Managing Director Matthew O'Kane called the purchase a "transformational event for Comet".
"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," Mr O'Kane said.
"The majority of Mt Margaret's resource sits in two already pre-stripped open-pits providing reduced capex pathways to production."
As part of the agreement, third-party company Minerals Mining and Metallurgy will make a $5m non-refundable payment to Glencore.
Comet will issue 25 million of its shares to Mount Isa Mines at 20c a share.
Comet plans to undertake a public offer to finance the takeover.
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Derek Barry
Editor of the North West Star Mount Isa since January 2016. Prior to that, an editor at several regional southern Queensland newspapers. Passionate about telling local stories. Comes with a strange accent to due an Irish accident of birth.
Editor of the North West Star Mount Isa since January 2016. Prior to that, an editor at several regional southern Queensland newspapers. Passionate about telling local stories. Comes with a strange accent to due an Irish accident of birth.
