Strategic Minerals has agreed to the final sale of its Leigh Creek copper mine in South Australia to Cuprum Metals, in a structured deal designed to keep it exposed to rising copper prices.
It has signed a definitive agreement, with completion subject to conditions including Australian foreign investment approval. With copper prices at record highs and the project’s economics improving, Strategic Minerals said it had opted to take less cash upfront in exchange for a royalty that provides ongoing exposure to the mine’s future output.
Under the terms, it will receive A$750,000 in cash, shares worth up to A$3m in a new Cuprum-related company that is expected to list, a 2% royalty on the first 24,900 tonnes of copper produced, and earn-out payments of 20% of half-yearly operating cash flows up to A$4m once commercial production begins.
The company said all proceeds would support its strategic focus on the Redmoor tungsten-tin-copper project in south-east Cornwall.