$175m mine deal
Wednesday, 27th April, 2011
By Gina Wilson
The majority owner of the city's closest gold mine has done a $175 million deal with mining giant Xstrata Copper to offload a promising Queensland copper project.
The deal would see Exco Resources, which has a 75 per cent stake in the White Dam Gold Mine, cashed up with money to explore more tenements in north west QLD while also repaying shareholders.
The West Australian-based explorer said last week it had sold its Cloncurry Copper Project, almost eight months after speculation about the deal began.
"Exco is pleased to announce that it has entered into an agreement to sell the Cloncurry Copper Project to Xstrata Copper for $175 million," managing director Michael Anderson said in a statement.
If the proposal goes ahead, Exco said it would use the money to fund a major drilling program at its Hazel Creek copper-gold-magnetite mineralisation, also in north west QLD.
Following the sale Exco would have $220 million in cash, continue its 75 per cent in the White Dam Gold Mine and have a further 2,400 square kilometres of highly prospective exploration tenements in the Cloncurry region.
Exco said it also wanted to give $100 million to shareholders.
"The Exco Board believes the proposal is in the best interest of all shareholders and recommends that shareholders approve the proposal."
The company said it hoped to have a shareholder meeting by June.
The announcement last week saw almost 10 million shares traded and pushed Exco's price up more than 10 per cent, to end at $0.685.