Mt Margaret project includes a total of six mining and infrastructure licences covering 3,412ha of area, and three exploration tenements, with both potential near-term copper production and regional exploration upside
Comet acquires Mt Margaret copper project. (Credit: Chris Münch on Unsplash)
Comet Resources has executed an amended binding agreement to fully acquire the Mt Margaret Copper project and associated regional tenements near Cloncurry, Queensland.
The Australian mineral exploration company is acquiring the project from Mount Isa Mines, a wholly-owned subsidiary of Swiss mining company Glencore.
In January 2023, Comet amended its share sale agreement with Minerals Mining and Metallurgy (MMM), Mount Isa Mines (MIM) and Mount Margaret Mining (MTM).
Under the terms of the amended agreement, MMM will acquire the fully issued capital of MTM, in exchange for an upfront payment of $5m, upon completion.
Comet will issue 25 million fully paid ordinary shares to MIM, at an aggregate deemed issue price of $0.20 per share, which amounts to $5m.
In addition, Comet will issue 10 million options exercisable at $0.30 per option and offer a 2% net smelter return royalty from the Mount Margaret project for the life of the mine.
Comet Resources managing director Matthew O’Kane said: “The acquisition of Mt Margaret continues to be a transformational opportunity for Comet. Changes have now been made to the capital structure as a result of feedback from investors.
“These changes eliminate most of the options previously approved to be issued as part of the transaction, as well as the 12-month escrow of 52.3m shares to be issued to MMM shareholders.
“Additionally, Shaw and Partners and Aitken Mount Capital Partners will now join as each a Joint Lead Manager to the offer, bringing additional fund-raising capabilities.”
Upon closing of the acquisition, Comet will raise $27m, including a $5m priority offer, to fund the acquisition and initial post-acquisition predevelopment activities.
In addition, Glencore will provide a A$27m ($19m) loan to the mining company, for replacing the Environmental Bond.
Mt Margaret project includes a total of six mining and infrastructure licences covering 3,412ha of area, and three exploration tenements covering 46 sub-blocks.
The project has both potential near-term copper production and regional exploration upside.
It hosts known iron oxide copper gold (IOCG) style deposits including JORC Measured, Indicated and Inferred Mineral Resources of 13Mt at 0.78% copper and 0.24g/t gold.
Matthew added: “Mt Margaret was a substantial past-producing copper mine that we’re able to acquire due to portfolio rationalisation of a global tier one miner.
“It contains existing Mineral Resources of 13.0Mt, with over 95% of this resource in the Measured and Indicated categories. Most of Mt Margaret’s Resource sits in two already pre-stripped open pits providing Comet with a reduced capex pathway to production.
“The new changes to the transaction structure provide further improvements for both existing and incoming shareholders alike and we look forward to closing the deal in Q1 of 2023.”