The more I look into W.H.Soul Pattinson, the Parent company of CopperChem Ltd, the more faith I have in the long term growth of SMD. I do not think they would have invested so much recently in SMD (about $2.6M) if they did not see a future in the Qld resources both known and possible for copper, silver and gold. SOL overall have performed very well this last financial year, 27% rise in Net AT Profit to $156M.
"CopperChem Limited, a controlled entity of Washington H. Soul Pattinson and Company Limited participated in the offer and Pitt Capital Partners Limited took up the short fall from the entitlement offer,resulting in the Group’s holding in Syndicated Metals Limited to increase from 18.9% to 30.9%."
From SOL annual report
"CopperChem and Exco are copper and gold exploration companies which have plant that is capable of producing copper sulphate, copper concentrate, and gold bullion. The completion of the Mt Colin open-cut mine during the year realised production of 359,538 tonnes of ore at 2.59% copper, producing 9,303 tonnes of copper in feed which was 13% above forecast. The copper price received by CopperChem fell from US$7,104 per tonne in July 2014 to US$5,456 per tonne in July 2015, a decrease of 23.2%. In response, the copper sulphate production from the solvent extraction (SX) and crystal plants at the Cloncurry Operations has been wound down in preparation for being placed on care and maintenance. The Cloncurry Operations’ copper concentrator remained on care-and-maintenance for the year. Both the copper concentrator and SX/crystal plants remain valuable assets for processing copper ores in the Cloncurry region. CopperChem will review the options of re-starting both facilities, including the option of moving them to one of its project areas, as additional copper resources become available and subject to the prevailing copper price. Exploration activity is set to ramp up with the drilling of a number of prospective targets in the Cloncurry region. Revenue from copper sales for the year was $43.9 million driving a much improved operational result. However, earnings were below forecast as a direct result of the drop in the copper price. Unfortunately the price reduction corresponded with the sale of the highest tonnage and grades of ore from the Mt Colin open-cut mine."
I think a rise in copper prices will make this area very attractive again. I am wondering if CopperChem is going to buy out SMD's Qld projects or takeover SMD ? They could move their plant to the Barbara project maybe ? SMD have the same mining resources as CopperChem within the Qld projects in hand.
"CopperChem will review the options of re-starting both facilities, including the option of moving them to one of its project areas, as additional copper resources become available and subject to the prevailing copper price"
I still think they plan to sell of their known resources in QLD to fund gold exploration elsewhere, I only hope there is a buyer out there. :
"Accordingly, Syndicated has agreed with CopperChem (its 50% partner at Barbara) that the Joint Venture will pursue other avenues to realise value from its Barbara project."
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