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.

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Altona said the company can meet its immediate obligations under the agreement from its existing A$47m of cash resources.

"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."

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.

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During an initial life of 11 years, the mine is estimated to produce 39,000t per annum copper and 17,000oz of gold.

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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.