A private equity firm backed by former mining heavy-hitter Owen Hegarty has acquired the mothballed Mt Gordon copper mine.
Despite copper trading at six-year lows, Jason Chang – chief executive of Hegarty’s private equity vehicle EMR Capital – reportedly told Fairfax this week it was the “ideal time” to acquire the Queensland copper mine for $45 million.
“Even at current prices, we think this asset can achieve a very appealing return on equity, with its potential cost structure, long life, upside potential and good grade and scale,” Chang was quoted as saying.
“Despite the headlines, we believe copper has a great future; supply is getting more difficult.”
Mt Gordon’s former owner, Aditya Birla Minerals, announced the sale to the ASX on Monday.
Aditya Birla Minerals managing director Neel Patnaik said the transaction “reflects the substantial efforts undertaken by Aditya Birla Minerals, [the mine operation] and its employees, and the executives of ANZ Corporate Advisory over the past two and a half years, since Mt Gordon was placed under care and maintenance in April 2013 and a strategic review process was started for the Mt Gordon operation.”
ANZ Corporate Advisory acted as exclusive financial advisor to the small mining business during the process.
Mt Gordon is located in northwest Queensland, roughly 120km north of Mt Isa. The mine is set up to produce copper in concentrate at an annualised rate of 1.4mtpa of ore processing.
Chang, who co-founded EMR with Hegarty four years ago, reportedly told Fairfax he expects the fund will make more investments over the next six months, with a focus on potash, copper, gold and coking coal.