Austral Resources Withdraws from Anthill Project Agreement to Focus on Queensland Copper Strategy

Austral Resources Australia (ASX: AR1) has confirmed it will withdraw its interest in the Anthill project agreement (APA) shared with Glencore Australia and private company Secover.

The parties have agreed to the full and final release of Austral to all current and future claims and their security over Austral’s north-west Queensland copper assets under the APA.

A withdrawal price of $51.98 million comprising a cash payment of $37.6m and the issue of 159.8 million Austral shares equivalent to $14.38m has been agreed upon.

The settlement value approximates Austral’s obligations under the APA, at a discount to the current estimated value of ore to be processed from the Anthill copper deposit based on current prices.

The settlement will be funded from Austral’s existing cash reserves and share placement capacity and is scheduled to close at month end.

Copper Production Access

On release from the APA, Austral will immediately access its own copper production and the opportunity to increase production at the Mt Kelly processing plant from its Mt Clarke/Flying Horse and Lady Annie cutback operations, including the potential to accelerate its heap leach re-mine program.

The agreement will be earnings and cash flow accretive to Austral over the remaining period required to process Anthill ore.

Pending copper prices, production levels, and new mining campaigns starting earlier than currently forecast, the potential exists for the company to increase this accretion.

Release from the APA will allow the company to continue its north-west Queensland copper strategy utilising existing cash reserves without the need for additional equity raising.

Improved Operational Clarity

Austral non-executive chair David Newling said extinguishment of the APA would add immediate operational clarity and potential value to the company.

“While we appreciate the support that Glencore and [Austral shareholder] Springwood Group showed in entering into this APA, all parties agree we would greatly benefit from the ability to process our own copper and accelerate an increase in production from our current mining campaigns and heap leach remine at Mt Kelly,” he said.

“This transaction is extremely positive and will provide our shareholders with direct exposure to the prevailing copper price, our own production profile and the opportunity to increase production at Mt Kelly, while continuing the refurbishment of the Rocklands copper mine.”

“From now, the company will provide shareholders with direct exposure to the prevailing copper price, its own production profile, and the opportunity to increase that production at Mt Kelly, whilst we continue the refurbishment of the Rocklands facility.”

“The company remains fully funded through to the recommencement of operations at Rocklands in mid-2027 and continues to investigate options, including the current Hammer Metals Limited proposal, to increase its resource base where appropriate.”