From the Australian and Fin Review last week "OZ Minerals is on the hunt for a big brother to pick up the running on a $3 billion development of its Carrapateena copper/gold deposit in South Australia, with the likely sale of a minimum 50 per cent stake in the project tipped to fetch between $300 million and $500m and sharply reduce OZ's forward capital commitments."
Such a deal would: • Add $300 to $500 M of cash to the OZL balance sheet, resulting in cash + liquid assets (i.e SFR) in the order of $800 to $1000M. This would enable OZL to acquire a third project. • Improve the implied value for the Carrapateena Project as the sale price would give a benchmark and the transaction would significantly improve the likelihood of the project being developed in the near term.
OZL Price at posting:
$3.93 Sentiment: LT Buy Disclosure: Held
