After selling its CSA copper mine in Cobar, New South Wales, to Metals Acquisition Corp (MAC) for $US1.1 billion ($1.64 billion) earlier this month, Glencore and MAC have officially closed the sale.
Under the transaction, Glencore has received $US775 million in cash and $US100 million in shares, along with:
$US75 million deferred payment to be paid within 12 months
$US150 million payment contingent upon future copper prices
1.5 per cent life of mine net smelter return royalty
Glencore will offtake 100 per cent of the copper concentrate produced and MAC will assume ownership and the full operation of the mine.
“The acquisition of CSA represents a strong strategic fit for MAC. Our management team’s operational expertise, understanding of regional operations and relationships with local stakeholders uniquely position us to identify and realise the full potential value of the asset,” MAC chief executive officer Mick McMullen said in 2022.
“We believe that copper has favourable fundamentals that will continue to support an elevated copper price.
“Copper is expected to play a key role in the global energy transition ‘megatrend’, with approximately one million tonnes per annum of new supply required from 2024 onwards in order to meet the surging demand forecast.
“With few new projects globally in the pipeline, increasing permitting issues and jurisdictional risk, and declining copper grades across the industry, we believe that there are significant challenges ahead to close the projected supply deficit.”
Australian near-term copper producer True North Copper will commence trading on the Australian Securities Exchange (ASX) as of today.
The news arrives as Truth North Copper’s (TNC) merger with Duke Exploration was completed June 7 2023, after being first announced February 28 2023.
Prior to its listing, TNC completed an underwritten capital raising, and a priority offer to existing Duke Exploration shareholders, raising a total of approximately $37.3 million (before costs) at $0.25 per share.
TNC is a copper, cobalt and critical minerals mining company based in Queensland, Australia. Its principal assets include the copper-goldCloncurry project and the high-grade copper cobaltMt Oxide project.
The company aims to be Australia’s next copper producer through its Queensland-based portfolio of copper and cobalt assets. TNC managing director Marty Costello described the ASX listing as the latest step towards reaching this goal.
“Our ASX listing is the latest milestone in our transformation into Australia’s next copper producer,” Costello said.
“With funds raised via our offer and our recently completed acquisition of the high-grade Mt Oxide copper-cobalt-silver project, we have all the assets in place to achieve this. This timing is excellent given the current price cycle for copper and expected supply deficit in the next few years.
“We have a large combined indicated, measured and inferred JORC resource base containing 326,000 tonnes of copper as well as significant cobalt, gold and silver and infrastructure including a copper concentrator, solvent extraction plant and copper sulphate crystallisation plant.
“We plan to move into production in the second half of (2023), subject to successful technical studies and further financing if required, while we will continue to explore our projects for opportunities to expand our resource base, with drilling commenced at Mt Oxide’s vero resource underway.”
Coal miner Glencore will sell its CSA copper mine in Cobar, New South Wales, to Metals Acquisition Corp (MAC) for $US1.1 billion ($1.64 billion).
CSA is an established, high-grade producing, long-life underground copper mine with an estimated current mine life of over 15 years, and MAC has identified opportunities to further extend it, subject to exploration success.
The sale is the latest indicator of copper’s growing importance, after Evolution Mining extended its Ernest Henry mine life to 2040 earlier this week.
Similarly, South32 is looking to grow its portfolio, identifying a copper mine that could be an M&A fit. The copper outlook continues to be supported by the rising decarbonisation narrative, with the commodity a highly efficient conduit for renewable energy systems such as solar, wind, hydro and thermal energy.
The Glencore/MAC deal has been on the table for some time now, with the companies entering into an agreement back in March 2022.
“The acquisition of CSA represents a strong strategic fit for MAC. Our management team’s operational expertise, understanding of regional operations and relationships with local stakeholders uniquely position us to identify and realise the full potential value of the asset,” MAC chief executive officer Mick McMullen said at the time.
“We believe that copper has favourable fundamentals that will continue to support an elevated copper price.
“Copper is expected to play a key role in the global energy transition ‘megatrend’, with approximately one million tonnes per annum of new supply required from 2024 onwards in order to meet the surging demand forecast.
“With few new projects globally in the pipeline, increasing permitting issues and jurisdictional risk, and declining copper grades across the industry, we believe that there are significant challenges ahead to close the projected supply deficit.”
MAC will acquire 100 per cent of the issued share capital of Cobar Management from Glencore. Cobar Management owns and operates the mine.
The company has made arrangement for the copper streams with Osisko Gold Royalties in the US.
“CSA is a high-grade, long-life asset, with significant upside that can be unlocked by the MAC management team,” Osisko president and chief executive officer Sandeep Singh said.
“We are pleased to see this important transaction nearing completion, and look forward to having both the silver and copper streams contribute to our near-term cash flows.”
Greatland Gold has announced that the management of the Juri joint venture (JV) will transfer to Newcrest, its joint venture partner from July 1.
The Juri JV is an unincorporated joint venture between Greatland Gold and Newcrest. Greatland own 49 per cent of the JV and Newcrest own 51 per cent. The JV was formed in November 2020 to accelerate exploration at the Paterson Range East and Black Hills exploration licences.
Under the terms of the farm-in and joint venture agreement which governs the Juri JV, Newcrest could elect to become the joint venture manager at any time following an initial period.
Newcrest has now exercised its right to do so and will assume this responsibility from the beginning of the 2024 financial year. The transfer of management of the Juri JV to Newcrest does not affect any of Greatland’s other rights as a joint venture participant.
Greatland managing director Shaun Day said the company welcomes Newcrest elevating its engagement and interest in the Juri JV.
“Greatland strongly believes in the prospectivity of the Juri Joint Venture tenure and will continue to be an active participant following the upcoming management transition,” Day said.
“The shift of Juri Joint Venture management to Newcrest provides Greatland’s exploration team the opportunity to put greater focus on our 100 per cent owned portfolio of highly prospective tenure together with our responsibilities as the new manager of the farm-in and joint venture arrangement with Rio Tinto on the Paterson South project.”
Evolution Mining has doubled the copper and gold reserves and extended the mine life to 2040 since it purchased the Ernest Henry mine outright in January 2022.
The completion of Ernest Henry’s mine-extension pre-feasibility study (PFS) – announced on Monday – has seen the mine’s ore reserve increase 126 per cent from a December 2022 estimate to 77.4 million tonnes, with contained copper increasing 103 per cent to 589,000 tonnes and contained gold jumping 124 per cent to 1.11 million ounces.
The PFS indicates the mine extension could deliver approximately 655,000 ounces of payable gold and 375,000 tonnes of payable copper, delivering an internal rate of return of 28 per cent (based on a base case of $2400 per ounce of gold and $12,000 per tonne of copper). This equates to a net-present value (NPV) of $690 million.
Capital costs would be $450–500 million, with 60 per cent of this supporting development below the 750mRL (metres relative level). Majority of the capital would not be required until the 2026–27 and 2027–28 financial years.
Ever since Evolution acquired 100 per cent of Ernest Henry, the company has been aggressively exploring the project, regularly announcing resource upgrades and increases in the mine’s copper potential.
Evolution has also announced its board has greenlit capital investment for the expansion of its Mungari plant in WA, with a $250 million investment to boost throughput from 2 million tonnes per annum (Mtpa) to 4.2Mtpa.
“Mungari has demonstrated its capacity to consistently and reliably deliver approximately 135,000 ounces per annum in recent years,” Evolution managing director and chief executive officer Lawrie Conway said.
“This plant expansion unlocks the very large regional resource base, reduces all-in-sustaining costs (AISC) by 18 per cent to $1750 per ounce, extends the mine life out to 15 years, and grows production to over 200,000 ounces post commissioning.
“The expansion was always envisaged and formed part of our due diligence when we acquired the Kundana and East Kundana properties in 2021. Having successfully integrated the operations, this is now the next logical phase of making Mungari a cornerstone asset of Evolution.”
Evolution has also announced a restructure of its debt profile which it said will unlock an additional $445 million of liquidity over the next three years. The restructure included a $US200 million ($303 million) US private placement (USPP) and the replacement of existing $590 million term loan facilities with a reduced four-year, $300 million loan.
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As South32 looks to grow its portfolio, the company seems to have identified a copper mine that could be an M&A fit.
According to The Australian Financial Review, South32 has sounded out a potential acquisition of Khoemacau Copper Mining which operates its namesake copper mine in Botswana.
Khoemacau ramped up to full production in February – achieving 3.65 million tonnes per annum (Mtpa) of throughput – and has a nameplate production capacity of 60,000 tonnes per annum of copper, with silver as an added-value product.
Khoemacau has an estimated mine life of 20 years, producing copper at C1 cash costs of $US1.15 per pound. Mining is currently taking place from Zone 5 – an underground mine where three corridors are producing an average of 1.2Mtpa of ore each.
It is understood South32 has engaged RBC Capital Markets as it prepares an indicative bid for Khoemacau Copper Mining, while the AFR also believes the company could come up against opposition, including from Sandfire Resources.
Khoemacau could be seen to complement Sandfire’s Motheo copper mine, which produced first copper concentrate in late May.
The major currently produces copper from its 45 per cent stake in the Sierra Gorda mine in Chile – an asset it acquired in February 2022.
The company also has a series of earn-in agreements with resource companies around the world. This includes two emerging copper exploration projects in Argentina – Chita Valley and Don Julio.
Kerr said Argentina could be a copper jurisdiction to keep an eye on in years to come.
“Argentina’s become an interesting location,” he told reporters at a Melbourne Mining Club luncheon in late April. “When we first started doing some work there, we were probably the only ones. You’ve got BHP there, you’ve got Barrick there, you’ve Glencore there – everyone’s sort of pouring money into that jurisdiction at the moment.
“If you look at where it is, it’s on the other side of the Chile mountains where basically all the copper is. So I think that’s an area that’s going to develop pretty quickly. The challenge around that jurisdiction is it tends to be on average higher levels of arsenic, which typically you blend out, or you look at new technology to remove it.”
Elsewhere, South32’s portfolio is made up of commodities such as alumina, aluminium, zinc, silver, lead, nickel and manganese.
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“Everything that we’ve tried to do with it [Linatex rubber] to see if it can fail, it hasn’t failed yet,” says Chance Harvey, director of Engineering and Mine Plant Development, Pattison Sand.
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“It significantly reduces material costs associated with changing out too frequently. On the cost side, most importantly, it enabled us to produce more copper,” said Akhbayar Enkhsaikhan, concentrator maintenance manager, Oyu Tolgoi Mine.
Ramelius Resources has provided an exploration update on its Penny mine and other exploration projects within its portfolio of gold assets in Western Australia.
The Penny gold mine is located approximately 150 kilometres south-east of the Mt Magnet operations and 550 kilometres north-east of Perth in WA.
Ramelius has reported that the Penny gold mine received its final ore haulage approvals on May 11, and its haulage schedule is in place to clear site stockpile by June 30. The operation has seen underground diamond drilling commence with visible gold seen in core outside southern boundary of Penny North’s mine plan.
Ramelius’ Bartus East site also saw diamond drilling continuing with results from shallow-angle holes including 60 metres at 7.82 grams per tonne (g/t) Au from 448 metres, with an estimated true width of approximately 45 metres.
The Mt Finnerty joint venture (JV) Ramelius shares with Westar Resources saw ongoing surface diamond drilling yielding recorded an excellent follow-up result of 8.70 metres at 13.4g/t Au from 173.5 metres.
Adjacent to the previously reported 13 metres at 4.37g/t Au and eight metres at 4.87g/t Au, Ramelius said further drilling is planned at the JV once structural interpretation is confirmed.
Ramelius managing director Mark Zeptner said the progress made on its various gold projects was satisfying.
“It is pleasing to have finally obtained the full ore haulage approvals for our high-grade Penny mine, which should see us clear the site stockpiles and mine production, in what promises to be our best Quarter for the financial year,” Zeptner said.
“In addition, our exploration and resource development teams continue to hit high grade material at Bartus East, which confirms similar wide, high-grade intercepts to those received late last year.
“Our Mt Finnerty JV with Westar Resources is also looking more and more interesting with additional high-grade hits and the geologists beginning to understand the controls to the mineralisation.”
With the Newmont takeover of Australian gold miner Newcrest now given the green light by the board, Australia’s gold landscape is set to change forever.
Newcrest has a strong portfolio of assets which the US gold giant is evidently keen to get its hands on, such as the Brucejack gold and silver mine in Canada, the Lihir gold mine in PNG, Cadia Hill in NSW, and the Telfer mine in WA – both among Australia’s largest gold mining operations.
Newmont already owns the Boddington mine in WA and the Tanami mine in the NT, so the takeover will put the company in control of four out of six of Australia’s largest gold mines.
But industry experts from the Australian Financial Review (AFR) are speculating that not all of Newcrest’s assets will make the cut, and will be divested before the dust settles.
Newmont chief executive officer Tom Palmer told AFR that he considers only two of Newcrest’s assets “tier one”, which are Cadia Hill and Lihir.
“Those assets are tier one, world-class by any measure. So, they are firmly in the portfolio,” he told AFR.
When the ink dries, this will give Newmont a portfolio of ten tier one assets.
Palmer also showed a keen interest in Newcrest’s Canadian assets, Brucejack and Red Chris, which are located nearby its own Saddle North project. Palmer called this combination of gold assets a “golden triangle”.
“I would call the golden triangle a tier one district,” he said.
That’s not to say that all everything else faces divestment, but it seems that Newmont will be considering its new assets very carefully.
“We are certainly looking for value over volume,” he said.
“So as we work our way through understanding the portfolio, we will be making judgements about what our go-forward portfolio is.”
Newcrest’s Cadia Hill is the second largest gold mine in the country.
“In the early 2000s, the control of the Australian gold industry stood at 80 per cent,” Surbiton managing director Sandra Close said.
“It dropped to just under 30 per cent Australian control as overseas gold companies bought up Australian operations, and it was when the Aussie dollar was down around 50 (US) cents, so it was pretty cheap for them to buy the operations.
“Over time a lot of those operations were sold, so we’re currently looking at 60 per cent Australian control in the gold industry.
“But the recent announcement with Newmont and Newcrest, and we’ll be watching that closely, if that did go ahead it would mean Australian control would fall just below 50 per cent again.
“Whether we’d see yet another round of acquisitions as we did in the early 2000s is a pretty interesting question.”
The spot price of gold is currently trading at US$2015.60 per ounce.
The Carrapateena operation in South Australia. Image: OZ Minerals
BHP has shed more light on its plans for South Australia after recently acquiring OZ Minerals and its Prominent Hill and Carrapateena copper mines.
“Globally, BHP has the largest copper endowment of any company, based on ownership interest,” BHP chief operating officer Edgar Basto said at the 2023 Austmine Conference.
“In South Australia we have Olympic Dam, which is one of the world’s most significant deposits of copper, gold, silver and uranium. Olympic Dam is a fully integrated processing facility from ore to metal.
“We also added to our copper assets in SA with the acquisition of OZ Minerals, bringing their mines at Carrapateena and Prominent Hill into our portfolio.”
Basto also highlighted BHP’s Oak Dam copper project in SA, where the company was recently given the green light to commence its next phase of exploration.
“Oak Dam is an exciting prospect and potential growth option,” he said. “We’re undertaking further exploration to better define the resource and inform our future planning.
“Anyone who is familiar with the geography of the Gawler Craton will at once see the opportunity that all of this presents.”
Basto said it is important to not look at these mines and projects individually but rather synergetically, with the potential to “build a copper province that could put SA on the global copper map”.
Basto will oversee the integration of Prominent Hill and Carrapateena into BHP’s portfolio, through which he has three core objectives.
“Firstly, (I’m focused on) delivering safe and reliable operations at Olympic Dam, Prominent Hill and Carrapateena,” he said.
“Secondly, (I’m focused on) integrating the BHP and OZ Minerals businesses with a focus on people and culture. And thirdly, (on) developing options to build a copper province here in South Australia.”
Basto said for South Australia to realise its copper opportunity, collaboration is needed between the local mining industry and state and federal governments to support policy choices and investments that can enable South Australia to compete on the global marketplace.
“Let me provide some global perspective,” Basto said. “According to Geoscience Australia, Australia is ranked number two in the world for copper resources but number eight in the world for mined copper production.
“Last year, BHP produced more than 1.5 million tonnes of copper globally.
“This year, we expect to produce around 200 thousand tonnes from Olympic Dam. And around 115 thousand tonnes from Carrapateena and Prominent Hill.
“Here in South Australia, we have nearly 70 per cent of Australia’s copper resources but we produce just under 30 per cent of Australia’s mined copper production.
“The Gawler Craton has huge un-tapped potential… just imagine for a moment that we can develop a mining hub centred around a smelter that brings even more of SA’s high quality copper to global customers.”
BHP is putting plenty of eggs in the South Australia basket, with a committed vision to maximise the state’s copper future.
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