OZ Minerals buy gold-copper project in Prominent Hill region

Carapateena spectacular discovery by a Canadian company Teck Resources are seen as the big foreign players to the global financial crisis, now its ownership changed hands to OZ Minerals Ltd (ASX: OZL).

OZ Minerals said today it had paid $US240 million for the project, making an immediate deposit of $US10 M.

Ownership was given as 58% held by engineer Rudy Gomez, 34% by Teck Australia with the balance of 8% held by various minorities.

Teck had made Carrapateena its major new foreign project after Gomez in 2005 had mortgaged assets to utilise a South Australian drilling grant to produce a spectacular long copper intersection. This saw a Teck official camped on Gomez's doorstep.

Stepped up exploration by Teck produced some enormous copper gold hits, including one of 905 metres grading 2.17% copper and significant gold within which there was a section of 84m @ 4.78% Cu and 1.1 grams/tonne gold.

However, along came the global financial crisis that hit Teck hard and stalled its exploration expenditure and saw overtures begin last year for the sale of the project.

Acquisition of Carrapateena is a good fit for OZ Minerals, as it is cashed up and earning a big cash flow from the Prominent Hill copper-gold project. It is 250 kilometres south east of Prominent Hill.

Despite its perfomance and recent profit announcement, OZ Minerals has been criticised by some Australian analysts for not taking available acquisitions, and also for not getting strong exploration results from holdings and joint ventures near Prominent Hill - an amazing complaint, given the fact most regional search issues are less than two years old with targets being under deep soil cover.

OZ Minerals chief executive Terry Burgess said Carrapateena is one of the largest undeveloped copper projects in Australia and has the potential to produce between 50,000 and 150,000 tonnes per annum of copper "for a significant mine life."

Carrapateena is a new monster project in the far north of South Australia which has produced Prominent Hill and the world-class Olympic Dam which is one of the world's biggest copper deposits and dominates world uranium resources.

The project is 130 km north of the Spencer Gulf port of Port Augusta and is 100 km south east of BHP Billiton's Olympic Dam. It is also only about 75 km from Stuart Highway and is also near the main northern railway.

Source