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MarketScreener Homepage  >  Equities  >  AUSTRALIAN SECURITIES EXCHANGE LIMITED  >  OZ Minerals Limited    OZL   AU000000OZL8

OZ MINERALS LIMITED

(OZL)
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OZ Minerals Limited : - OZ Minerals to 'loan carry' Minotaur through to commercial production from Jericho copper deposit

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05/14/2019 | 10:57am EDT

At the end of March 2019, OZ Minerals Limited (ASX: OZL, OZ Minerals) through investment of A$10 million attained 70% beneficial interest in the Eloise Joint Venture ('Eloise JV') tenements, which contains the Jericho deposit.

OZ Minerals and Minotaur Exploration Limited (ASX: MEP, Minotaur) have agreed to structure a new, additional joint venture ('Jericho Joint Venture') specifically for the Jericho project, the area of which is excised from the current Eloise JV area. The new arrangement provides for Minotaur to be 'loan carried' for all further work in relation to Jericho until the project is developed and in commercial production.

In return, OZ Minerals' beneficial ownership of the Jericho Joint Venture is increased from 70% to 80% (Minotaur 20%), effective 1 April 2019. From that date, loan amounts advanced by OZ Minerals will be non-recourse and repayable only if positive cash flow emanates from production at Jericho.

Minotaur will thus carry no pressing financial burden during the pre-operation phases comprising: resource definition; scoping; permitting; financing; developing and mining of Jericho, such amounts presently indeterminate but potentially amounting to many millions of dollars. Minotaur's loan balance is only to be repaid from 70% of Minotaur's share of positive mine cash flow with interest accruing at an attractive rate.

Minotaur and OZ Minerals signed a binding term sheet setting out formulation of the Jericho Joint Venture, to be converted into a full form definitive agreement over the course of the next 60 days.

Drilling Underway

Drilling at Jericho re-commenced1 in April 2019 with the objective being to define a maiden JORC resource from the central zone. Minotaur's 20% share has started accruing under the loan funding structure. OZ Minerals appointed Minotaur manager and operator of the Jericho work programme.

Minotaur Comment

Andrew Woskett, Managing Director of Minotaur Exploration, stated: 'I am delighted to announce the new Jericho Joint Venture with OZ Minerals. Minotaur's Board considers the loan carry arrangement over the Jericho project is, at this early pre-resource stage, a highly attractive route for the Company as Minotaur is relieved of all expenditure for its share of Jericho from now until mine cash flow eventuates. Moreover, Minotaur avoids highly dilutive equity funding to finance its share of the project.

This new joint venture underscores the strong relationship created between the two companies in pursuit of base metal discoveries since 2016.

OZ Minerals has a demonstrated track record in both developing and executing large underground copper mines and has a proven inclination to progress attractive projects aggressively. Minotaur's Directors welcome OZ Minerals' expression of faith in the potential of the Jericho discovery and its tangible support for Minotaur as a respected partner.'

Update on the Eloise Joint Venture

With Jericho excised from the Eloise JV, OZ Minerals and Minotaur are re-structuring that joint venture (excluding Jericho) and will provide separate detail on this important development.

Contact:

Andrew Woskett

Tel: +61 8 8132 3400

Web: www.minotaurexploration.com.au

(C) 2019 Electronic News Publishing, source ENP Newswire

Stocks mentioned in the article
ChangeLast1st jan.
MINOTAUR EXPLORATION LTD 0.00% 0.039 End-of-day quote.-7.14%
OZ MINERALS LIMITED 1.11% 10.05 End-of-day quote.12.95%
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Financials (AUD)
Sales 2019 1 143 M
EBIT 2019 254 M
Net income 2019 184 M
Finance 2019 141 M
Yield 2019 2,10%
P/E ratio 2019 16,62
P/E ratio 2020 14,61
EV / Sales 2019 2,69x
EV / Sales 2020 2,18x
Capitalization 3 219 M
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Mean consensus OUTPERFORM
Number of Analysts 13
Average target price 10,8  AUD
Spread / Average Target 8,8%
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Andrew Cole Chief Executive Officer, Executive Director & MD
Rebecca Joy McGrath Independent Non-Executive Chairman
Warrick Ranson Chief Financial Officer
Tonianne Dwyer Independent Non-Executive Director
Peter Christopher Wasow Independent Non-Executive Director
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