Copper Mountain bids $70M for Altona Mining
Copper Mountain Mining (TSX: CMMC) announced that it has tabled a $70-million, all-share bid for Australia-based Altona Mining (ASX:AOH) and its district-scale Cloncurry copper-gold property, located 95 km northeast of Mount Isa in Queensland.
According to Altona's updated feasibility study, Cloncurry is a 19,200-tonnes-per-day open pit mine comprised of four copper-gold deposits that would produce 86 million lbs. copper and 17,200 oz. gold annually over a 14-year mine life at cash costs of $1.92 per lb.
In an official statement, Copper Mountain said that if the acquisition comes to fruition, it would be targeting production by 2020 and would likely fund the $217 million capital expenditure requirements of the mine via debt facilities and treasury.
The acquisition will be effected pursuant to a Merger Implementation Deed under which Altona has agreed to propose the scheme that would allow it to become a wholly owned subsidiary of CMMC.
Copper Mountain also informed that, as part of the new deal, it is offering Altona shareholders 0.0974 of a Copper Mountain share, which will be dual listed on the Australian and Toronto Stock Exchanges, for each share held. The offer equates to a 41.7% premium based on closing prices at the time of the deal.
In Canada, Copper Mountain’s flagship asset is the 75%-owned Copper Mountain open-pit mine that sits in southern British Columbia. Japan’s Mitsubishi Materials holds the remaining stake in the operation and has an off-take agreement entitling it to all the life-of-mine copper concentrate production.
The mine has around 15 years life remaining based on proven and probable reserves of 133 million tonnes grading 0.35% copper, 1.47 grams silver per tonne and 0.12 gram gold per tonne.
Copper Mountain acquisition of Altona would create multi-jurisdictional, mid-tier copper producer whose annual potential copper production would be of approximately 160 million pounds by 2020. Combined proven and probable reserves would be of 2.1 billion pounds of copper and combined measured and indicated resources would be over 4.1 billion pounds of copper and an additional 3.6 billion pounds of copper in inferred resources.
In the meantime, the Vancouver-based miner expects to produce between 75 million to 85 million pounds of copper this year.