Altona Mining (ASX:AOH) announced last month it has signed an agreement with Sichuan Railway Investment Group (hereafter ‘SRIG’) whereby SRIG can earn a 60% stake in the Cloncurry project in Queensland by coughing up almost $215M in cash. The agreement also requires Altona to fund the JV-co with $38M in cash, resulting in a pre-cash valuation of $105M for the Cloncurry project.
As a quick reminder, the Cloncurry project contains in excess of 3.5 billion pounds of copper as well as almost 400,000 ounces of gold, and the joint venture partners will first focus on bringing the Little Eva project in production. The total cash position of the jointly owned company would be sufficient to cover the development costs at Little Eva, so no external (debt) financing would be needed to bring it back into production. A feasibility study completed last year expected a total annual copper production of 85 million pounds as well as 17,000 ounces of gold, and it would be really interesting if Altona would keep its 40% (almost free carried) interest in the project.
> Click here to go to Altona’s website
Disclosure: The author holds no position in Altona Mining. Please see our disclaimer for current positions.
