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PERTH (miningweekly.com) – Hong Kong-listed MMG has confirmed that it is in discussions with mining major GlencoreXstrata regarding the acquisition of the Las Bambas copper project, in Peru.
MMG, the Australia-based offshore arm of Chinese State-owned Minmetals, stated that it formed part of a larger consortium, which included GUOXIN International Investment Corporation and Citic Metals.
Las Bambas, which cost some $4.2-billion to develop, was expected to produce 400 000 t of copper, as well as gold and silver by-products from the second half of 2014.
MMG cautioned, however, that there was no assurance at this point that a binding agreement would be reached.
Meanwhile, the Tanzanian government has given regulatory approval for a joint venture (JV) between MMG and ASX-listed IMX Resources over the Ntaka Hill nickel sulphide project.
In September last year, the two companies entered into $60-million farm-in agreement over the Nachingwea project, which includes the Ntaka Hill deposit.
In the first stage, MMG would sole-fund about $10-million on exploration over the next 12 months to earn its first 15% stake in the JV. MMG could then elect to sole-fund a further $25-million within a further 18-month period to increase its JV interest to 40%.
Over the Stage 3 earn-in, MMG could elect to sole-fund a further $25-million within a further 30 months, increasing its stake in the JV to 60%.
MMG would become the manager of the JV and would initially focus on deep drilling at the Ntaka Hill prospect, while accelerating assessment of the regional setting.
IMX reported on Wednesday that the approvals now received comprised consent from the Commissioner of Minerals in the Tanzania Ministry of Energy and Minerals, and the approval of Stage 1 of the JV agreement by the Tanzanian Fair Competition Commission (FCC).
Discussions with the FCC regarding the approval of the subsequent stages of the JV were ongoing and would likely be finalised before the completion of Stage 1.
In the event that there were delays in securing approval from the FCC for the subsequent stages, the timeframe for MMG’s expenditure would be suspended until the approvals were provided.
The Ntaka Hill project, which is a potential openpit mine, is located about 250 km from the Port of Mtwara, Tanzania, and currently has a Joint Ore Reserves Committee-compliant measured and indicated resource of 120 000 t of contained nickel, as well as an inferred resource of 238 000 t of nickel at an average grade of 0.66% nickel.
A 2012 scoping study placed a price tag of some $230-million on the development of the Ntaka Hill project to deliver a yearly production of between 10 000 t and 15 000 t of nickel.