BRITISH COLUMBIA – Vancouver’s Abacus Mining and Exploration and Poland’s KGHM Polska Miedz are creating a joint venture to facilitate development of Abacus’ Afton-Ajax copper-gold project near Kamloops. KGHM has agreed to spend US$37 million to produce a bankable feasibility study (BFS) for Afton-Ajax in return for a 51% interest in it.
The Polish partner has an option to acquire a further 29% interest when the BFS is complete for an additional payment of up to US$35 million. At that time, KGHM will arrange the financing for its (80%) proportionate interest in the project capex and will offer to arrange financing for Abacus’ (20%) proportionate interest in the on commercially reasonable terms. KGHM has made an immediate cash payment of C$4.5 million to Abacus.
KGHM is one of the world’s larger copper producers with several mines, concentrators, smelter and refinery. In 2009 the company sold 509.9 million tonnes of copper (cathode and wire rod), 1.2 million oz of silver and 818,000 oz of gold for net earnings of approximately C$832.5 million.
The Afton-Ajax project is located at the site of a former producer. The latest technical report envisions a new mine and mill that would produce 106 million lb of copper and 100,000 oz of gold annually. Open pit mining would begin in 2013 and continue for 23 years. The preliminary economic assessment is posted at www.AMEMining.com.