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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 : to loan-carry Minotaur to production

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05/16/2019 | 06:41am EDT

Copper/gold miner Oz Minerals and fellow listed Minotaur Exploration have struck a number of agreements over Minotaurs tenement holdings in Queensland.

Following Oz Minerals obtaining a 70% interest in the Eloise copper/gold joint venture (JV), by investing A$10-million in the project, the two companies have now agreed to form a separate JV over the Jericho deposit, which is contained within the greater Eloise project area.

The Jericho JV agreement allows Minotaur to be loan-carried for all future work in relation to the Jericho project, until it has been developed and has reached commercial production.

In return, Oz Minerals interest in the Jericho JV will increase from 70% to 80%, effective from April 1, with loan amounts advanced by Oz Minerals to be non-recourse and repayable only if positive cash flow emanates from production at Jericho.

Minotaur MD Andrew Woskett said on Tuesday that the loan-carry arrangement over the Jericho project was a highly attractive route, as the company was relieved of all expenditure for its share of Jericho until cash flow from the mine eventuated. This would mean that Minotaur did not have to turn to highly dilutive equity funding to finance its share of the project.

Meanwhile, Oz Minerals and Minotaur have agreed to restructure the existing Eloise JV, with Oz Minerals committing to contribute a further A$3-million toward exploration over the next 24 months, with its 70% interest in the project remaining static.

The additional funding will be used for exploration assessment of several new geophysical targets with signatures similar to that of the Jericho anomaly.

Once Oz Minerals has completed its additional spend, Minotaur will have the option of either contributing to the project on a 30% basis, or to convert its interest into 20% and be loan carried on similar terms as the Jericho JV.

In addition, Oz Minerals and Minotaur have struck a strategic alliance over the Cloncurry region. The alliance, which will be 70% owned by Oz Minerals and 30% by Minotaur, will see the parties work exclusively with each other for prospect identification and acquisitions around the Cloncurry district.

To initiate the alliance, Oz Minerals will fund Minotaurs prospect research and project generation activity to A$1-million over two years.

Each separate project presented by Minotaur, and accepted by Oz Minerals, will be sole-funded by Oz Minerals up to A$4-million over a three-year period, with the projects to be 70% held by Oz Minerals and 30% by Minotaur.

Minotaur could elect to convert its interest in a particular project to a 20% loan carry interest through to project commercial production and cash flow, with loan amounts and interest accrued only to be repaid from cash flow from the relevant project.

In instances where Oz Minerals elected to participate in a particular project, the company would pay A$300 000 to Minotaur on acceptance, spend up to A$1-million on the determination of a positive scoping study, and up to A$2-million on the completion of a positive prefeasibility study.

(c) The Observer 2019 Observer Media Ltd. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

Stocks mentioned in the article
ChangeLast1st jan.
MINOTAUR EXPLORATION LTD 0.00% 0.04 End-of-day quote.-4.76%
OZ MINERALS LIMITED 0.20% 10.21 End-of-day quote.15.80%
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Financials (AUD)
Sales 2019 1 144 M
EBIT 2019 254 M
Net income 2019 184 M
Finance 2019 141 M
Yield 2019 2,05%
P/E ratio 2019 16,95
P/E ratio 2020 14,90
EV / Sales 2019 2,76x
EV / Sales 2020 2,24x
Capitalization 3 300 M
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Average target price 10,8  AUD
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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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