HARMONY Gold said it had completed the $230m takeover of Eva Copper, a prospect situated in Australia’s Queensland following approval by the country’s Foreign Investment Review Board.
The transaction, which is with Copper Mountain Mining Corp. includes the upfront cash payment of $170m which will be funded by Harmony’s revolving credit facility.
The South African firm said today it was comfortably within covenant agreements with lenders. The transaction “marks the beginning of our strategic diversification into copper, a future-facing metal,” it added.
“Eva Copper will further de-risk the business as it provides entry into a tier 1 jurisdiction, counter-cyclical diversification of revenue and meets Harmony’s investment criteria,” said the firm’s CEO Peter Steenkamp today.
A 12 month detailed review of the feasibility study and optimisation process into Eva Copper, previously conducted by Copper Mountain, was underway. “Harmony will determine the most effective way of executing the project and financing the capital requirements to bring the mine into production,” it said.
According to Copper Mountain’s study, it would require pre-production development capital of $597m in order to commission Eva Copper. Project commissioning was expected to take between two to three years post a review and optimisation study, said Harmony.
The project is expected to yield 100 million pounds of copper a year and 14,000 ounces of gold annually over an expected mine life of 15 years.