Syndicated Metals has signed an agreement to sell its 50% stake in the Barbara Copper Project in Queensland to its joint venture partner, CopperChem.
Located 60km north-east of Mt Isa, the Barbara Copper Project contains a JORC 2012 mineral resource.
Syndicated Metals and CopperChem, as part of a joint venture, have been operating this project since 2013. Each of these companies holds a 50% interest in the project.
Syndicated Metals managing director Andrew Munckton said: “CopperChem has always been in the best position to develop this asset given their strong operational base in North Queensland.
"We are pleased to have reached an agreement which enables them to move the Barbara Copper Project forward against the backdrop of an improved copper price and cost environment in North Queensland.”
An off-site processing study was completed by the JV in October 2015 based on the development of two open pits. Processing will be undertaken as per toll-treatment under a two-year project life.
The study indicated that the project is sensitive to copper price fluctuations and hinges on acceptable processing terms from toll-treatment providers. The project partners had agreed to pursue alternative avenues to realise value from the project.
Based on the recommendations of the study and a revised corporate strategy, Syndicated Metals acquired the Monument Gold Project in Western Australia in mid-2016, and since then has been focusing its efforts on gold exploration in prospective Laverton district of Western Australia.
The transaction involves A$2.3m in cash payable in a single installment upon completion of the sale and purchase agreement.
It also includes a provision for production royalties payable on the first 10,000t of copper-in-concentrate (or ore-equivalent) produced by the Barbara Copper Project.
The royalty includes 1% of the net smelter return (NSR) generated from the sale of concentrate or ore equivalent subject to a minimum invoiced copper price of $2.50/lb, as well as 2% of the NSR generated from the sale of concentrate or ore equivalent subject to a minimum invoiced copper price of $3/lb.
The transaction is subject to approval from the shareholders of Syndicated Metals, and an indicative approval from the Queensland Minister of Mines for the transfer of Syndicated’s interest in the Barbara Copper Project to CopperChem.