This article was in todays AFRThe number of pure copper mining...

This article was in todays AFR

The number of pure copper mining stocks on **promotion blocked** looks set to grow after micro-cap explorer AIC Mines struck a deal to take Queensland’s Eloise copper mine out of private hands.

The $27 million cash and scrip deal will ensure the current owner of the mine – a private company controlled by Barminco founder Peter Bartlett – becomes a strategic shareholder in AIC Mines, with close to 30 per cent of the shares on issue.

Eloise is a small mine having recently produced about 11,500 tonnes of copper and 7000 ounces of gold a year.

For context, that would put AIC Mines copper output at about 9 per cent of the cumulative volumes that OZ Minerals expects to produce from its three mines this year.

But the built infrastructure at Eloise makes AIC Mines a potential consolidator of the famous base metal region around Cloncurry, where a host of nearby copper assets lack their own processing infrastructure.

The 25-year-old Eloise mine has about four years of official resource life left, and AIC will prioritise drilling with the hope of extending the life further.

The company is seeking to raise $35 million to help it digest the acquisition.

Investors have in recent years lamented a shortage of pure copper stocks on the local exchange. Copper is widely expected to enjoy strong demand in coming decades amid continued urbanisation and the push to decarbonise.

While BHP and Rio Tinto are major producers, their shares typically move in lockstep with iron ore prices rather than copper, while the preponderance of gold in Newcrest Mining’s portfolio means its shares also rarely reflect movements in copper prices.

OZ Minerals and Sandfire were a virtual pure copper mining duopoly in the local market over the past decade, but a new miner of scale emerged this year when EMR Capital floated its copper assets under the banner 29Metals.

A1M will join a band of small copper producers on the ASX, such as Aeris Resources and Aurelia Metals, while Canada’s Copper Mountain set up a second listing in Australia in 2018.A1M is led by Aaron Colleran who worked in business development for Evolution Mining from its inception in 2011 until 2018. Evolution was one of Australia most acquisitive and fastest growing companies during that period, buying assets including the Cowal mine in NSW and an interest in Queensland’s Ernest Henry mine which are now the pillars of its business.

Evolution’s market capitalisation is now $6 billion higher than when it was formed in 2011 through a combination of assets from Newcrest Mining, Catalpa and Conquest Mining.