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PERTH (miningweekly.com) – Copper miner Oz Minerals has broadened its investment criteria for secondary projects in the gold and base metals sector and reported this week that it would also consider buying smaller and distressed assets to support its producing Prominent Hill copper mine, in South Australia.
Chairperson Neil Hamilton said at the company’s annual general meeting that while Prominent Hill remained a high-quality asset, and was the backbone of the company, the single-mine production profile came with a degree of risk.
“We have broadened our investment criteria to expand opportunities under consideration, and we will look to own multiple assets that generate cash now, or are capable of generating cash in the near future.”
Hamilton noted that while the volatile commodities market did not provide a sensible platform from which to make predictions, the company did see a positive long-term outlook for copper.
“While we remain a copper-focused company, we will now also look at opportunities in other base metals or gold, where our existing expertise can bring value.”
Hamilton reported that Oz was contemplating smaller assets than those previously considered, given the company’s revised investment criteria of value and risk. The assets under consideration could also include distressed assets or those that require transformation to unlock lost value.
“This refined investment approach is one of the reasons behind needing to be an agile and decentralised organisation, supported by our relocation to Adelaide.”
The move to Adelaide was part of Oz Minerals’ A$44-million cost saving initiative undertaken earlier this year, which included the divestment of a stake in Sandfire Resources, the restructuring and relocation of its corporate offices, initiatives to enhance the Carrapateena resource, in South Australia, and the suspension of the Carrapateena sales process.
Hamilton said that notwithstanding the recent changes at Oz Minerals, the company would maintain its discipline around investment and acquisitions, as well as its commitment to enhance shareholder value.
“I would have to add that we have, in recent years, had our critics for not being more aggressive in our growth strategy, but as we review what we have done we make no apology, and have no regrets, for the fact that we have, on a number of occasions, not succeeded in our attempts to acquire assets where others have been prepared to pay significantly more than we believed represented sensible value for our shareholders. This discipline will continue,” he added.