OZ Minerals inks $90 million deal for copper-moly mine in Chile

Australian copper producer OZ Minerals has struck a deal with Canada's International PBX Ventures for a 90% interest in the Copaquire copper-molybdenum property in Chile.

Under terms of the agreement, OZ can earn a 90% stake in Copaquire by making cash payments of $90 million and drilling up to 30,000 metres.

The earn-in would take place in stages, starting with a series of cash payments totalling US$400,000 for an initial 15,000 metres of drilling. In a second stage, OZ would pay PBX $10 million for a 10% stake in Copaquire and a commitment to drill another 15,000m. Completion of the second stage would give OZ the option to acquire an additional 80% for $80 million, at which point the parties would form a JV to continue developing the property.

According to PBX, the Copaquire property is a copper-molybdenum porphyry system located in northern Chile:

"This arc-parallel belt includes 30 porphyry Cu-Mo deposits and prospects with the largest amount of copper concentration in the world, totalling about 220 million tonnes of copper.  Teck's Quebrada Blanca as well as Xstrata/Anglo American's Collahuasi mines are within 15 kilometres of the Copaquire property."

The Vancouver-based company owns 8 exploration properties in Chile and is currently in the process of spinning out 6 of them into a new company, Chilean Metals Exploration Ltd. OZ Minerals' flagship project is the Prominent Hill copper-gold mine in South Australia.

The Australian reports OZ has been on the hunt for more mines since 2009, when it sold all its operations except Prominent Hill; it has $750 million in the kitty for acquisitions. The company bought the Carrapateena copper-gold project in South Africa last year for $250 million, and put in a failed bid for the Cupru Min mine in Romania earlier this year.