Engineering & Mining Journal

JUL 2014

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

Issue link: https://emj.epubxp.com/i/342236

Contents of this Issue

Navigation

Page 7 of 99

6 E&MJ; • JULY 2014 www.e-mj.com NEWS-LEADING DEVELOPMENTS Initial capital to develop the project was estimated at $3 billion. Taca Taca's copper and molybdenum concentrates would be transported by rail from the project to the port of Mejillones, near Antofagasta, in Chile. Copper con- centrates would be shipped to Asian cus- tomers. Molybdenum concentrates are assumed to be sold in Chile. The railway line connecting Anto- fagasta and the city of Salta, Argentina, is located about 10 km from the Taca Taca project. The line has the capacity to handle transport of all of the con- centrates produced by the project. The PEA assumed that the project would operate its own fleet of locomotives and rolling stock to transport the concen- trates and consumables between the mine site and port. First Quantum Chairman and CEO Philip Pascall said, "The acquisition of Lumina is another step in First Quantum's long-stated objective of geo- graphical diversification through the acquisition of world-class, early-stage copper assets. Taca Taca will significant- ly add to First Quantum's development pipeline and is at the stage where we can apply our resources and development expertise to realize its full potential and further add to First Quantum's copper production profile." Augusta Agrees to Increased Hudbay Acquisition Offer Hudbay Minerals and Augusta Resource Corp. announced on June 23 an agreed transaction whereby Hudbay will acquire Augusta for Hudbay shares and warrants that value Augusta at about C$555 million. The agreement ended Augusta's four-month resistance to an unsolicited Hudbay takeover effort that began in February with an all-share offer that valued Augusta at about C$540 million. Augusta's primary asset is its Rose- mont copper-molybdenum project 50 km southeast of Tucson, Arizona, USA. Augusta Executive Chairman Richard Warke had characterized Hudbay's initial offer as "grossly inadequate." However, the project has had to deal with permit- ting delays, and the potential for addi- tional delays growing out of the sighting of an ocelot in or near the Rosemont project area in late May ( E&MJ; , June 2014, p. 10) has taken some of the gloss off the property. Augusta's board of directors unani- mously recommended that Augusta shareholders accept Hudbay's revised offer. Warke said, "After a thorough process to consider all of our alternatives, we are pleased to have agreed on a mutu- ally beneficial transaction representing a successful conclusion to our value maxi- mizing process...Our agreement with Hudbay provides Augusta shareholders with an attractive premium for their shares and a stake in a growing interme- diate base metals mining company with a portfolio of producing mines and devel- opment projects, including the world- class Rosemont project." Turquoise Hill Disputes Mongolian Tax Claim Turquoise Hill Resources on June 26 filed a formal notice of dispute with the government of Mongolia regarding an audit report it received from the Mongolian Tax Authority on June 23 claiming that Oyu Tolgoi LLC, the operat- ing company for the Oyu Tolgoi copper- gold mine in southern Mongolia, was sub- ject to unpaid taxes, penalties and disal- lowed entitlements associated with the initial development of the mine. Turquoise Hill holds a 66% ownership interest in Oyu Tolgoi LLC and "is of the firm view that Oyu Tolgoi LLC has paid all taxes and charges as required under the Investment Agreement and Mongolian law and strongly disagrees with the claims in the audit report," the compa- ny's announcement said. The Oyu Tolgoi Investment Agreement outlines the dispute resolution process. The filing of a notice of dispute by Turquoise Hill was the first step in that process, which includes a 60-day negoti- ation period. If the parties are unable to reach a resolution during this period, the dispute can be referred to international arbitration. Outstanding shareholder issues, including tax claims, must be resolved before further investment in the devel- opment of an underground mine at Oyu Tolgoi can proceed, Turquoise Hill said. Consequently, distribution of the underground feasibility study will be delayed. Oyu Tolgoi came into production as an open-pit operation in early 2013 and has been building production since that time. The mine produced 76,700 mt of copper and 157,000 oz of gold in concentrates in 2013. Production in the first quarter of 2014 was 25,300 mt of copper and 66,000 oz of gold in concentrates. Development plans for Oyu Tolgoi include a 95,000-mt/d-underground block-cave mine. Development of the underground mine has been on hold since August 2013, due to unre- solved issues that include shareholder ownership issues; agreement on a com- prehensive funding plan, including project finance; completion and approval of a feasibility study; and obtaining all necessary permits for the mine's expansion. Augusta Resource Corp.'s primary asset is the Rosemont copper-molybdenum project located 50 km southeast of Tucson, Arizona, USA. Augusta estimates the Rosemont deposit contains 7.5 billion lb of copper in measured and indicated, 5.9 billion lb in proven and probable and 1.1 billion lb in inferred resources. EMJ_pg04-27_EMJ_pg04-27 7/2/14 1:50 PM Page 6

Articles in this issue

Links on this page

Archives of this issue

view archives of Engineering & Mining Journal - JUL 2014