Australian copper-gold miner OZ Minerals (ASX:OZL) has begun a compulsory takeover Avanco Resources (ASX:AVB), after months of slowly increasing its interest in the Brazil-focused explorer.
The Adelaide-based company said the fact it now owns more than 90% of Avanco allows it to acquire all of the remaining shares to acquire it entirely.
Adelaide-based OZ Minerals first launched its A$418 million- (about $320 million) takeover bid for the fellow listed copper junior in March, with the goal of expanding its operations into South America.
The takeover will give Oz control over Avanco’s Antas copper-gold mine, its only one currently in operations, and two copper prospects within the Carajás region of Brazil, plus an early stage gold prospect in neighbouring Maranhao. The junior currently produces around 14,000 tonnes of copper, but targets around 50,000 tonnes.
Carajás has similar geology to South Australia, where copper mines such as Oz’s Prominent Hill, and Carrapateena, as well as BHP’s Olympic Dam are contained in “iron oxide copper gold” structures.
At around 1,800km2, Carajás is the second largest land holding in a region known for iron oxide copper-gold deposits of which Vale’s 200ktpa Salobo is the prime example. In January this year, Avanco acquired an option for 100% of the Rio de Janeiro giant’s Pantera copper project near its Antas mine, which produced about 14,000 tonnes of copper last year and generated $17.3 million of profit.
According to Avanco, the mine is expected to produce up to 13,000 tonnes in 2018.