UPDATE: Chinalco Yunnan Inks Deal On Australian Copper Project
07 February 2012 - 12:42PM
Dow Jones News
Chinalco Yunnan Copper Resources Ltd. (CYU.AU), the
international investment arm of China's Yunnan Copper Industry,
said Tuesday that it has struck a deal to earn a controlling stake
in Xstrata PLC's (XTA.LN) Mount Frosty copper project in
northeastern Australia by spending A$4.5 million (US$4.8 million)
on exploration over the next six years.
Chinalco Yunnan said in a statement that it can earn an initial
51% interest in the project by spending A$1.5 million within three
years and drilling 1,500 meters a year, and can gain a further 24%
after that. Xstrata has retained the right to buy back 26% of the
project by paying three times the expenditure contributed by
Chinalco Yunnan, which would give it a 49% stake and Chinalco
Yunnan 51%.
Mount Frosty is located about 60 kilometers east of Mount Isa in
Queensland state, near Chinalco Yunnan's Mount Isa project and the
Mary Kathleen joint venture project it shares 70-30 with Goldsearch
Ltd. (GSE.AU).
Chinalco Yunnan, which is 21%-owned by Aluminum Corp. of China's
Yunnan Copper unit, in October agreed to buy Xstrata's early stage
Humito copper exploration project in northern Chile. Under the
terms of that deal, Chinalco Yunnan committed to minimum spending
and drilling each year for five years, while Xstrata's copper
subsidiary will retain a 3% net smelter royalty.
-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094;
robb.stewart@dowjones.com
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