PERTH (miningweekly.com) – ASX-listed Syndicated Metals has agreed to sell its 50% interest in the Barbara copper project, in north Queensland, to its joint venture partner CopperChem for A$2.3-million in cash and a net smelter royalty of between 1% and 2% on the first 10 000 t of copper-in-concentrate produced, subject to the copper price.

Syndicated on Monday told shareholders that the transaction would allow the company to crystalise up-front value for its shareholding in the Barbara project, with the proceeds from the sale to be used for ongoing exploration and evaluation of the company’s Monument gold project, in Western Australia, and at its other projects in Queensland.

“CopperChem has always been in the best position to develop this asset given their strong operational base in north Queensland. We are pleased to have reached an agreement which enables them to move the Barbara copper project forward against the backdrop of an improved copper price and cost environment,” said Syndicated MD Andrew Munckton.

The Barbara project has a mineral resource of some 4.75-million tonnes, grading 1.59% copper for 75 000 t of contained copper. The project is also estimated to host some 23 000 oz of gold.

A 2015 feasibility study found that the project could produce 16 223 t of copper, 2 753 oz of gold and 43 327 oz of silver over a 21-month mine life, based on the development of two openpit mines, with ore processing to be completed under toll treatment agreements.

Under the terms of the agreement, a 1% net smelter royalty would be payable on the first 10 000 t of copper-in-concentrate at a copper price of $2.50/lb. At a copper price of $3/lb, a 2% net smelter royalty will be applicable. Where the copper price achieved fell below $2.50/lb, no royalty would be payable.

The transaction is subject to a number of conditions, including shareholder approval, and approval from the Queensland Minister of Mines.

“It is worth noting that, in addition to a trailing production royalty from the Barbara project, Syndicated retains its existing 1 600 km² tenement holding to the north-east and south-east of Mt Isa, including the Mt Remarkable and Southern Hub projects, in this world-class mineral district," Munckton said.