OZ Minerals strikes Chile copper deal

The search of Melbourne's OZ Minerals for a new project to expand its portfolio beyond its South Australian copper-gold interests has led it to strike a deal on an advanced copper-molybdenum project in northern Chile.

The deal with Canada's International PBX Ventursilica vibrating plant south africaes, could earn OZ a 90 per cent interest in PBX's Copaquire project by making cash payments of $US90 million ($91.2m) and 30,000m in drilling commitments.

Copaquire is described by PBX as an advanced exploration project covering more than 2000ha of a "major" copper-molybdenum porphyry system. The region is host to 30 porphyry copper-molybdenum deposits and prospects, with Teck's Quebrada Blanca and Xstrata-Anglo American's Collahuasi mines within 15km of the property.

OZ has been out to rebuild its portfolio beyond the Prominent Hill copper-gold mine since being reduced to the single operation in 2009 with the sale of all of its other assets to China's Minmetals as part of its financial restructuring following the global financial crisis.

Last year it acquired the advanced Carrapateena copper-gold project in SA for $US250m. But like Copaquire, Carrapateena is a long way off from providing OZ a long-term replacement for Prominent Hill.

OZ has $750m earmarked for an acquisition to beef up its portfolio but has yet to find one that suits at the right price. OZ managing director Terry Burgess told the annual meeting yesterday that OZ was "very actively looking for an acquisition".

"We are seeing more opportunities in the last few months than we did in the previous two years, especially with the current uncertainty in the economy," Mr Burgess said.

"Our preference is to acquire assets that will deliver production in the short term but we also will review later dated opportunities."

It was against that strategy background that OZ made an offer for Cupru Min earlier this year. It lost out to another bidder for the Romanian state-owned company but that winning deal has not been consummated.

The PBX deal falls in to the longer dated option category.

Mr Burgess said OZ had followed PBX for a number of years.

"While this will not bring in copper production in the short term, it is an illustration of some of the projects that we are reviewing that will, for a modest cost, build our (project) pipeline for the future," Mr Burgess said.

Meanwhile, OZ told shareholders that copper production from Prominent Hill this year would be towards the bottom half of its previous forecast for 110,000-130,000 tonnes of copper. That is due to increased mining of waste material during the year. OZ shares closed 19c, or 2.3 per cent, higher at $8.31 a share despite the downgrade.