Ivanhoe Australia acquires Barrick Golds' Osborne mines

Ivanhoe Australia Ltd, a copper-gold-uranium-molybdenum-rhenium exploration and development company, has entered into a strategic agreement to acquire Barrick Australia Ltd's Osborne copper and gold mine, at a cash consideration of A$17.4 million.

Ivanhoe Australia would also pay 2 per cent net smelter returns (NSR) royalty capped at A$15 million from ore extracted from the Osborne tenements, as well as the assumption of all site environmental obligations of A$18.4 million, the company said in a press release yesterday.

The deal is expected to be concluded by 30 September 2010.

The acquisition will also benefit Ivanhoe Australia by reducing the upfront capital cost for the Merlin development by approximately $100 million.

The Osborne Complex, 50 kilometres south of the Little Wizard-Merlin projects, includes developed mines, a 2 million tones per annum (mtpa) state-of-the-art copper / gold flotation concentrator, infrastructure and tenements.

The acquisition of Osborne is important not only for the exploitation of the world's highest grade molybdenum and rhenium deposit but it also provides for the opportunity to generate incremental cash flows from various copper and gold development projects included in the purchase.