Copper Mountain to Sell Australian Project to Harmony

Canada’s Copper Mountain Mining Corp. said it has reached an agreement with South Africa’s Harmony Gold Mining Co. Ltd. to sell its Eva copper project and the associated 2,100 km2 exploration land package in Queensland, Australia for a total cash consideration of $230 million. Under the terms of the transaction, Copper Mountain will receive $170 million in cash on closing of the transaction and up to $60 million in cash, based on a contingent payment arrangements. Harmony will pay Copper Mountain 10% of the incremental revenue generated from the Eva copper project and the Australian exploration land package above the revenue assuming a $3.80/lb copper price, which could amount to as much as $30 million. Under another contingent payment arrangement, Copper Mountain could also receive an additional $30 million for any new copper resource discovered.

The acquisition of Eva Copper will add at least 1.7 billion lb of copper and 260,000 oz of gold to Harmony’s mineral reserves. “Acquiring the Eva copper project is strategically important to our growth journey,” Harmony CEO Peter Steenkamp said. “It opens a new copper-gold frontier for Harmony within a highly attractive Australian mining area, supplementing our 50% interest in the Tier 1 copper-gold Wafi-Golpu project.”

Eva Copper has mineral reserves of 171 million mt grading 0.46% copper and 0.05 g/mt gold for 1.718 billion lb of copper and 260,000 oz of contained gold. It has an inferred resource of 307 million mt at 0.42% copper, 0.04 g/mt gold, for 2.85 billion lb contained copper and 381,000 oz gold. A May 2020 feasibility study, which was updated in December 2021, envisioning a conventional open pit with a conventional crush, grind, and flotation circuit, projected annual production of 100 million lb of copper and 14,000 oz of gold over an expected mine life of 15 years. Development capex was estimated at $597 million.

The closing of the transaction is subject to certain customary conditions, including approval from Australia’s Foreign Investment Review Board and Copper Mountain bondholder approval.

As featured in Womp 2022 Vol 11 -