South African mining company Harmony Gold has agreed to acquire Copper Mountain Mining’s Eva project and its 2,100km² exploration land package in Queensland, Australia, for $230m.

Situated in Queensland, the project is expected to add 1.72 billion pounds of copper and 260,000oz of gold to Harmony ’s mineral reserves.

The project involves a conventional open-pit operation with an annual production capacity of more than 100 million pounds of copper and 14,000oz of gold over its operational life of 15 years.

Harmony Gold will pay $170m in cash upon the deal’s closing.

The company will also make a contingent payment of up to $60m, which will comprise up to $30m ‘via a 10% sharing of net incremental revenue’ and up to $30m on the discovery of new copper resources and declared within the acquired tenements.

Harmony expects the acquisition to extend its diversification into copper, which it described as a ‘future-facing metal critical in supporting the global energy transition’.

Copper Mountain CFO Letitia Wong said: “This transaction strengthens our balance sheet and allows the Company to evaluate options with respect to our long-term capital structure.

“Further, as our recently announced Life of Mine plan demonstrates, the Copper Mountain Mine is expected to generate healthy free cash flow starting in 2023 and we expect mine operations and the 65,000 tonnes per day expansion to be self-funded going forward.”

The deal is due to close in the first quarter of next year and has been approved by the South African Reserve Bank (SARB).

It is currently pending approval from the Foreign Investment Review Board (FIRB) in Australia and Copper Mountain bondholders.

Harmony CEO Peter Steenkamp said: “Acquiring Eva Copper 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.”