PERTH (miningweekly.com) – Diversified major Glencore has struck a A$1-billion deal with gold miner Evolution Mining over its interest in the Ernest Henry copper/gold mine, in Queensland.

Under the terms of the agreement, Glencore would receive A$800-million in cash on the closing of the transaction, and a further A$200-million some 12 months after the closing of the transaction.

Evolution currently holds 100% of the gold and 30% of the copper production at the Ernest Henry mine, which delivered 23 882 oz of gold and 5 498 t of copper in the September quarter.

ASX-listed Evolution will assume full ownership and operational control of the copper/gold mine and will enter into a copper concentrate offtake agreement and separate ore tolling agreement with Glencore.  

“We have long coveted to own Ernest Henry. It is a world class asset, in Australia, and one which we know extremely well due to our successful investment in the asset in 2016 and we are proud that it will once again be 100% Australian owned,” said Evolution chairperson Jake Klein.

“The acquisition is consistent with our strategy, materially improves the quality of our portfolio and delivers both strong cashflow and mine life extension opportunities.

“The site management team have an outstanding track record of operational delivery and we are delighted they will be joining Evolution and look forward to working with them to make this an even better operation.

“We are also pleased to be continuing our strong relationship with Glencore and that the product will continue to be treated in the local region at its Mt Isa smelter and Townsville refinery,” Klein said.

Glencore CEO Gary Nagle said on Wednesday that Evolution had been a strong partner in the Ernest Henry mine for five years, and shared Glencore’s way of working and commitment to operating responsibly across all aspects of the business.

Glencore said that its commitment to north-west Queensland would continue with the Mount Isa Mines copper and zinc complex, copper smelter and Townsville copper refinery. Glencore will also increase its focus on lower-cost, long-life copper assets in its global portfolio like those in Africa and South America.

Glencore will offtake 100% of the copper concentrate produced at Ernest Henry mine.

The transaction is expected to close in early January 2022.