Shares in Canadian copper miner Quadra FNX Mining rose 5,8% on Monday, after the company announced a day earlier it has signed up Japan's Sumitomo Metal Mining and Sumitomo Corp to help fund its big copper/molybdenum project in Chile.
The two will contribute $724-million for 45% of the Sierra Gorda project, and will also arrange at least $1-billion in project financing or, if the funding is not available, will provide a $800-million loan.
The project is expected to cost an initial $2,88-billion, with first production scheduled for 2014, Quadra said on Sunday.
The Sierra Gorda project will produce an average of 483-million pounds of copper, 25-million pounds of molybdenum and 64 000 oz a year of gold for 20 years from current sulphide reserves, according to a feasibility study.
The partners have agreed that Sumitomo will buy 50% of the copper concentrate produced at Sierra Gorda and Quadra FNX will have the right to market the balance.'
Quadra has been looking for a partner to help finance the big mine for some time, and agreed in March last year to sell a stake of just under 10% in itself to Chinese utility State Grid, and form a 'strategic joint venture' on its Franke mine, also in Chile, as well as Sierra Gorda.
However, the deal broke down three months later, because the Chinese company was not prepared to spend any significant capital on Sierra Gorda until permits were received.
"Sumitomo is a capable JV partner, with extensive experience in copper mining partnerships in South America (including Cerro Verde, Candelaria, Ojos del Salado), and around the world (including Morenci, Northparkes and Batu Hijau)," UBS associate analyst Matt Murphy wrote in a note on Monday.
"Sumitomo has arranged project financing through the Japan Export bank on a number of major projects in the past; we would anticipate a project finance package with no hedging requirements and favourable interest rates."
Quadra FNX, which has mines in Canada, the US and Chile, was formed last year through a merger of Canadian miners Quadra Mining and FNX Mining.
Shares in the company gained C$0,79 on Monday, to C$14,48 apiece by 16:15 in Toronto.
related: stone crusher grinding mill high capacity crusher talc crusher machine
No comments:
Post a Comment