Glencore Xstrata sells 80% stake in copper project
Commodities giant Glencore Xstrata (LON:GLEN) agreed Friday to sell its majority stake in the undeveloped Frieda River mine in Papua New Guinea to Australian copper and gold miner PanAust (ASX:PNA).
The sale of one of the Asia-Pacific's largest copper deposits, believe analysts, is the freshest sign of a revival in mining deals, as a few commodities rebound.
As part of the agreement, PanAust will pay an initial $25 million upon closing of the transaction and a further $50 million on Dec. 31, 2015.
The Aussie miner has also agreed to acquire a 7.5% stake in Highlands Pacific, the minority partner in the Frieda River project, for $4.7 million.
Xstrata, which spent around $200 million on pre-development work, decided to sell its stake in the Frieda River well over a year ago, before the Glencore acquisition.
According to PanAust, the mine has the potential of generating an annual copper production of 100,000 tonnes, and gold by-products of 160,000 ounces.