Rio Tinto shares boosted by Winu copper gold project JV, iron ore prices
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More news: Shares in Rio Tinto are up nearly 1% to $120.05 after the mining giant said it has agreed to bring in Japan’s Sumitomo Metal Mining as a partner to develop the Winu copper-gold project in Western Australia.
Rio will sell a 30% stake in the project to Sumitomo and develop a broader strategic partnership between the two. Rio shares are also being bolstered by a steady increase in iron ore prices, which are currently at a four-week high.
Rio Tinto sells 30% in Winu copper-gold project to Sumitomo
The news: Mining giant Rio Tinto has agreed to bring in Japan’s Sumitomo Metal Mining as a partner to develop its Winu copper-gold project in Western Australia.
The numbers: Under the term sheet, Sumitomo will pay Rio Tinto $399 million for a 30% equity share of the project, comprising $195 million upfront and $204 million in deferred considerations contingent on milestones and adjustments to be agreed.
A pre-feasibility study for the Winu project with an initial development of processing capacity of up to 10 million tonnes per annum is expected to be completed in 2025, along with the submission of an environmental review document.
The context: The agreement includes exclusivity obligations to work towards a binding definitive agreement, with Rio Tinto to continue to develop and operate Winu as managing partner.
Both parties have also entered into a letter of intent to develop a broader strategic partnership to work together to explore opportunities for commercial, technical and strategic collaboration across copper, other base metals and lithium.
The Winu project, which is located in proximity to Rio’s Pilbara iron ore assets, is an attractive low-risk, long-life copper-gold deposit discovered in 2017.
What they said: “This is a unique opportunity to de-risk our investment, as we work with an experienced partner. We look forward to working more broadly as strategic partners to find new ways to deliver value across the metals and minerals supply chain,” Rio Tinto copper chief executive Katie Jackson said.
The source: ASX announcement
