Altona Mining has finalised an agreement with Chinese construction group Sichuan Railway Investment (SRIG) to form a joint venture (JV) for Altona’s Cloncurry Project in north-west Queensland, Australia.
For the project, SRIG would contribute $214.46m to have a 60% interest in the JV, while Altona will pump in $38m in two tranches of $28m and $10m to retain a 40% interest.
Altona said the company can meet its immediate obligations under the agreement from its existing A$47m of cash resources.
The JV will seek to develop a mine at Little Eva situated within the Cloncurry Project, which offers a large resource of 287 million tonnes (mt) at 0.6% copper , 0.04g/t gold for 1.65mt contained copper and 400,000oz of gold.
In March, the company announced a definitive feasibility study for the Little Eva development, which it anticipates construction of a seven million tonne per annum open-pit mine and flotation plant.
During an initial life of 11 years, the mine is estimated to produce 39,000t per annum copper and 17,000oz of gold.
Altona Mining managing director Dr Alistair Cowden said: "The contribution to be made by SRIG is based on an agreed value for the project of $105m, which clearly exceeds that implied by the company’s share price.
"Once the project is in production, it will sustain approximately 280 new direct jobs and Altona’s 40% interest will equate to 17,000t copper equivalent production."
SRIG is 100%-owned by the Sichuan provincial government and has 24 operating subsidiaries and a market capitalisation of $3bn.