Harmony Gold, a senior global gold producer, announced today that it has entered into an agreement to acquire the entity which owns 100% of the Eva copper project and a package of regional exploration tenements from Copper Mountain Mining Corporation.
The company said it has agreed to pay US$170 million in upfront cash plus a contingent payment of up to a maximum of US$60 million, consisting of up to US$30 million via a 10% sharing of net incremental revenue and up to US$30 million on a new copper resource discovered and declared within the acquired tenements.
The Eva copper project and the acquired tenements comprise 2 295 square kilometres of tenure within the world-class North West Minerals Province in Queensland, Australia.
According to a press-release, the acquisition of the Eva copper project will add 1.718 billion pounds of copper and 260 000 ounces of gold to Harmony's mineral reserves and extend the company's diversification into copper, a future-facing metal critical to the energy transition.
The May 2020 feasibility study and December 2021 update completed by Copper Mountain envision Eva as a conventional open pit with a conventional crush, grind, and flotation circuit, with expected production of 100Mlbs Cu per annum and 14koz Au per annum over an expected mine life of 15 years. A development capex estimate is US$597 million.
Harmony Gold said that diversifying into copper enables Harmony to participate in the global transition to a low-carbon economy, adding that this transaction will lower Harmony's overall risk profile and strengthen its cash flow in the medium to long term.
CEO Peter Steenkamp commented, "Acquiring the Eva copper project is strategically important to our growth journey. It opens a new copper-gold frontier for Harmony within a highly attractive Australian mining area, supplementing our 50% interest in the Tier 1 copper-gold Wafi-Golpu project. The Eva copper project lowers our risk profile, providing additional scale and meaningful diversification that positions Harmony for the future."
Importantly, the company noted that Board approval has been obtained from both companies and the legal agreements have been finalised, adding that the transaction is expected to be completed early in calendar year 2023.
Harmony Gold has operations and assets in South Africa and Papua New Guinea (PNG). The company's assets include one open pit mine and several exploration tenements in PNG, as well as 9 underground mines and 1 open pit operation and several surface sources in South Africa. In addition, Harmony owns 50% of the significant Wafi-Golpu copper-gold project – a tier 1 asset - in a joint venture in PNG.
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