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Australian firm Comet Resources has signed a deal to acquire the Mt Margaret copper project in Queensland from diversified major Glencore.

As part of the agreement, third-party company Minerals Mining and Metallurgy (MMM) will make a A$5m non-refundable payment to Glencore subsidiary Mount Isa Mines (MIM).

Comet will issue 25 million of its shares to MIM or its nominee. This will be done at an aggregated deemed issue price of 20¢ for each share.

A share sale agreement has also been signed by Comet with MMM to buy all the shares in the company. In return, Comet will issue 73.55 million of its shares and 36.77 million options.

Comet Resources managing director Matthew O’Kane said: “Acquisition of the Mt Margaret copper project is a truly transformational event for Comet.

“Mt Margaret is a substantial past-producing copper mine that we’ve been able to acquire due to portfolio rationalisation of a global tier one mining company.

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“It contains existing mineral resources of 13 million tonnes at approximately 1% copper equivalent, with over 95% of this resource in the measured and indicated categories.

“The majority of Mt Margaret’s resource sits in two already pre-stripped open pits, providing reduced CapEx pathways to production.”

Comet plans to undertake a public offer to finance the takeover and support in re-complying with the ASX listing rules.

From 2012 until 2014, the Mt Margaret project was operational from an open-pit mine. Operations were suspended due to the copper price environment and outlook at the time.

The Mt Margaret copper project has Joint Ore Reserves Committee-compliant resource of 13 million tonnes, at 0.78g/t copper and 0.24g/t gold.