South Africa-based gold mining company Harmony Gold is set to acquire Eva copper project in north-west Queensland, Australia, for a total consideration of up to $230m.
The company has signed an agreement to acquire Eva copper, along with its related exploration tenements from Canadian copper ores company Copper Mountain Mining.
The total consideration includes an upfront cash payment of $170m, in addition to a contingent payment of up to $60m.
The transaction, which has been approved by the South African Reserve Bank (SARB), is expected to complete in the first quarter of 2023.
Its closing is subject to certain customary conditions, including approval from the Foreign Investment Review Board (FIRB), and approval from Copper Mountain bondholders.
Harmony intends to fund the transaction with available cash, and debt facilities.
Harmony chief executive officer Peter Steenkamp said: “Acquiring Eva Copper is strategically important to our growth journey.
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 lowers our risk profile, providing additional scale and meaningful diversification that positions Harmony for the future.”
Eva Iron Oxide Copper gold deposit and its related tenements cover 2,295kms2 of area, within the world-class North West Minerals Province in Queensland, Australia.
With the acquisition of Eva Copper, Harmony will add 1.718 billion pounds of copper and 260,000 ounces of gold to its Mineral Reserves.
The acquisition will extend the company’s diversification into copper, a future-facing metal critical to the energy transition.
Macquarie Capital is serving as financial advisor, while Davies Ward Phillips & Vineberg as Canadian, and Corrs Chambers Westgarth as Australian legal counsel to Copper Mountain.
Copper Mountain president and CEO Gil Clausen said: “We are pleased with this transaction as it demonstrates the value the Company has developed in the Eva Copper Project since our acquisition of Altona Mining Limited in 2018.”
Copper Mountain CFO Letitia Wong said: “This transaction strengthens our balance sheet and allows the Company to evaluate options with respect to our long-term capital structure.
“Further, as our recently announced Life of Mine plan demonstrates, the Copper Mountain Mine is expected to generate healthy free cash flow starting in 2023 and we expect mine operations and the 65,000 tonnes per day expansion to be self-funded going forward.”
