Oz Minerals has been rushed by companies from across the world interested in becoming involved in the $3 billion development of its Carrapateena copper/gold deposit in South Australia.
OZ Minerals chief executive Terry Burgess said yesterday that a dozen interested parties were talking to the company about taking equity in the project, with the likely sale of a minimum 50 per cent stake tipped to fetch up to $500 million.
Mr Burgess revealed OZ was not wedded to maintaining an equity position in the deposit, the biggest undeveloped copper project in Australia, the 6.3 million-tonne copper resource coming along with a sweetener of 8.4 million ounces of gold.
“All options are on the table. It really is about what is the best value for our shareholders going forward,” Mr Burgess said.
“Obviously, from a personal point of view, I would like to see us retain a holding. But at the end of the day it is going to be what is best for the shareholders.’’
Mr Burgess has been chief executive since August 2009 and intends stepping down before February next year, if not sooner.
Carrapateena was acquired for $US250m in 2011 from Adelaide prospector Rudy Gomez and Canada’s Teck. It is OZ’s major growth project, but the capital cost of developing the deeply buried resource as an annual producer of 100,000- 120,000 tonnes of copper and 120,000 ounces of gold is a big stretch for OZ, prompting the search for an equity partner or a sellout.
The market expects that the sale of a majority stake in Carrapateena is likely to be completed before Mr Burgess departs.
He was glowing in the importance of Carrapateena’s location in South Australia to potential buyers.
“I think its location is very important to people in the data room. They say it is very difficult to find quality copper resources in countries where the sovereign risk is low,’’ Mr Burgess told The Australian.
“And, as I have often said, there probably isn’t a better place in the world to have a mining deposit than South Australia. It is a very supportive government, a very good public service and regulatory service that can actually expedite developments, permits and things like that.’’
Market valuations of Carrapateena are up in air pending the release of a pre-feasibility study and the release of a maiden resource estimate for the more recent Khamsin discovery, 10km from Carrapateena.
Both are expected mid year.