Targeting early production at Cloncurry Copper Project.
Vancouver-headquartered Copper Mountain Mining Corporation [TSX:CMMC] and Australia’s Altona Mining Limited [ASX:AOH] have agreed to merge by way of a Scheme of Arrangement pursuant to which CMMC will acquire the entire issued capital of Altona.
The acquisition will be effected pursuant to a Merger Implementation Deed (MID) under which Altona has agreed to propose the Scheme that would allow Altona to become a wholly owned subsidiary of CMMC.
The total consideration offered for all of the outstanding shares of Altona is valued at approximately A$93 million and represents 17 cents per share, a 41.7% 1premium to A$0.12, the closing price of Altona shares on the day prior to the execution of the MID.
Altona’s key asset is the 100% owned undeveloped open pit Cloncurry Copper Project in Queensland.
Cloncurry currently has a measured and indicated mineral resource containing over 0.95 million tonnes of copper and an inferred resource of 0.72 million tonnes of copper.
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The companies believe there is potential to add resources at depth and along strike in each of the deposits, and through exploration at numerous prospective targets within Altona’s approximately 3,970 sq; km and package.
CMMC’s principal asset is the 75% owned large open pit Copper Mountain Mine located in southern British Columbia near the town of Princeton. CMMC has a strategic alliance with Mitsubishi Materials Corporation which owns 25% of the Copper Mountain Mine and purchases 100% of the copper concentrate produced a under life of mine offtake agreement. Copper Mountain mine has a large resource that remains open laterally and at depth.
Directors and senior management of Altona have agreed to vote in favour of the Scheme in the absence of a superior proposal and subject to the independent expert concluding the Scheme is in the best interest of shareholders. Directors and senior management of Altona Jim O’Rourke, President and Chief Executive Officer of CMMC, said the company has been on the lookout for the right acquisition.
For some time, CMMC has patiently been evaluating cost competitive opportunities to achieve a step-change in copper production. Cloncurry exemplifies the criteria of low-risk, near-term and high quality for which we have been seeking,” Mr O’Rourke said.
“We intend to progress Cloncurry into production with the aim of doubling CMMC’s copper production profile to the range of 160 million pounds (73,000 tonnes) of copper per annum with significant precious metals credits. This additional copper production is timely to capitalize on the projected strong copper cycle.”
Altona Managing Director Dr Alistair Cowden, said the company are delighted to join CMMC to form a new high growth copper producer.
“We are excited to bring CMMC’s depth of experience in constructing and operating a large scale open pit copper mine to bear upon the Cloncurry Copper Project.
“Altona’s shareholders will receive a premium and will also gain immediate exposure to copper production just as copper prices have recovered and market shortfalls are predicted over the near term. This is a great opportunity for our shareholders to participate in the creation of a leading mid- sized copper producer.”
CMMC will continue to be headquartered in Vancouver, and plans to retain a regional office in Perth. Dr Cowden will remain in his position until the Scheme closes, after which he will be appointed to join the Board of Directors of CMMC and will continue in an executive role in Australia.