JOHANNESBURG (miningweekly.com) – Aim-listed Strategic Minerals has renegotiated the terms of its acquisition of the Leigh Creek copper mine, in South Australia, and has decided to purchase the mine for A$3-million through an equal mixture of cash and equity.
When Strategic Minerals announced the planned acquisition in October, it had intended to pay a total of A$5-million by way of royalties in combination with cash, shares and assumption of debt.
“The outright acquisition, as opposed to the previous arrangement involving a substantial portion of the consideration being paid by way of royalties, provides the company with flexibility to maximise the potential from the tenements, as well as the freedom to progress the project at its own pace. The new capital expenditure (capex) structure will allow us to minimise risks, notably extraction risk," explained Strategic Minerals MD John Peters.
The company is acquiring the Leigh Creek mine from Resilience Mining and believes the project represents a near-term, low capex production opportunity with early cash flow generation potential.
“We are delighted to add copper exposure to our portfolio of strategic projects. We believe that demand and supply factors for copper over the next five years will lead to price increases going forward, which in turn will add substantial shareholder value to Strategic Minerals,” said Peters.
The company owns the Cobre magnetite tailings dam project in the US, cobalt, gold, nickel and rare earth tenements in Western Australia and the Northern Territory, as well as the Redmoor tin/tungsten project in the UK.