AIC Mines has agreed to buy the Eloise copper mine in North Queensland from FMR Investments for $27 million, transforming the explorer into a producer.
The company has announced it will undertake capital raising of $35 million to fund the transaction and sustain capital for investments related to Eloise, including accelerated exploration expenditure and working capital.
According to AIC Mines, the Eloise site is currently producing 11,500 tonnes of copper and 7000 ounces of gold in concentrate.
It started production in 1996 with 339,000 tonnes of copper and 167,000 ounces of gold being produced at the mine to date.
AIC Mines entered the agreement through its subsidiary AIC Copper.
The transaction involves a cash payment of $5 million, $20 million in AIC shares and a contingent payment of $2 million in cash that is payable six months after completion.
AIC Mines stated the contingent payment is subject to whether production milestones are achieved.
FMR will hold 28-30 per cent of AIC’s issued capital once the transaction is completed.
“This is a tremendous development for AIC,” AIC managing director Aaron Colleran said.
“Our acquisition strategy has been to target late-stage Australian gold and copper projects where we can add value through exploration and development.
“We are confident that we can add significant value at Eloise as we ramp-up exploration and extend the mine life. Eloise is an excellent first acquisition for AIC as it provides immediate positive cashflow and entry into a prolific base-metals region that is ripe for consolidation.”
AIC Mines was formed in 2019 following a merger between Intrepid Mines and AIC Resources, with its strategy to operate gold and/or copper producing assets in Australia.
The company is currently exploring the Marymia copper-gold project and the Lamil project in Western Australia.
AIC Mines is listed on the ASX and has a share price of $0.245 per share at the time of writing.