Mining deal-makers see Cobar Basin ripe for consolidation

Metals Acquisition Corporation's CSA copper mine in Cobar, NSW.

Fresh from Rio Tinto striking a $10bn agreement to buy Arcadium Lithium, deal-makers in the mining space could soon be turning their attention to the Cobar Basin in central NSW, which is ripe for consolidation.

Some of the biggest names in gold mining, including Gold Fields, Newmont and Anglo Gold Ashanti along with iron ore miner Fortescue Metals, could move in to become consolidators of the region.

Metals Acquisition, which owns the CSA copper mine in Cobar, NSW, Kingston Resources, Aeris, Aurelia and Kingston Resources are also expected to be actively looking for opportunities.

Experts say that the Cobar Basin is a highly mineralised, yet under-explored province, and there’s a number of large operating plants in the region where the owners would be looking at buying tonnes in the ground owned by other companies, such as Metals Acquisition, Polymetals, Aurelia, Kingston Resources and Aeris Resources, to feed those units.

The cost and challenges for junior mining exploration groups to gain funding remain a dilemma for the industry, with few new projects coming on stream, while gaining permits from governments is becoming increasingly problematic.

Building mining processing plants involves a lot of capital spending as well as obtaining regulatory approvals as their construction is risky and time consuming, but the obvious solution is for bigger players to come in and take on the projects.

Between Metal Acquisition’s CSA plant, Polymetals Endeavor plant, Aurelia’s Hera and Peak plants, Kingston Resource’s Mineral Hill plant and Aeris Resources Tritton plant, there is 6.8 million tonnes per annum of plant capacity for processing resources in the basin.

Metals Acquisition’s focus is likely to be at the northern end of the Cobar Basin, and with a plant as part of its CSA project with 1.8 million tonnes of capacity per annum, and volumes last year of just 1.1 million tonnes, it has room to add additional resources.

Its mergers and acquisition opportunities could include Aurelia Metals, which would mean Aurelia’s copper and gold mined at its Great Cobar mine could be treated by Metals Acquisition’s CSA copper plant, as Aurelia’s lucrative zinc and lead from its Federation mine is treated at its own Peak plant at the northern end of the Cobar Basin.

Other opportunities that could be picked up by Metals Acquisition are the assets of precious metals explorer Peel Mining, namely its Mallee Bull and Wirlong copper resources, which are not large and relatively lower grade, so do not justify the construction of a plant.

Meanwhile, coming back into focus for Aeris Resources could be a merger with Aurelia Metals after the pair explored a deal in 2022.

Aeris has struggled to fill its Tritton plant, which has 1.8 million tonnes per annum of capacity, and by acquiring Aurelia or embarking on a merger, Aurelia’s Great Cobar copper and gold resource could be treated at Tritton, driving down overall processing costs.

At the southern end of the Cobar Basin, Kingston Resources could buy Peel Mining to extend the amount it produces through its Mineral Hill plant, with Peel’s zinc and lead from its Southern Nights and Wagga Tank exploration eventually processed there.

Kingston could also merge with the $43m Talisman Mining over time, which has announced base metals and gold results from its Durnings prospect, just 15km from Mineral Hill and its smaller Blind Calf copper discovery 2km away.

Alternatively, the $63m listed explorer Australian Gold and Copper, with its high grade zinc, silver and lead discovery Achilles, of which the nearest processing facility is Mineral Hill.

Finally, with the big players, gold mining giant Newmont, which has merged with Newcrest, could buy Waratah Minerals to increase the grade of its ore being treated at its Candia mine, considered one of the best in the world.

The mine, 25km from Orange, produces 600,000 ounces of gold per annum.

Another option is that South Africa’s Gold Fields could also buy Waratah Minerals with its Spur exploration project after announcing it had formed a joint venture with exploration company Gold and Copper Resources.

Meanwhile, AngloGold Ashanti also has a joint venture with the Toronto-listed Inflection Resources, which has been looking in the North Molong area of NSW for gold and copper.

Fortescue Metals has a joint venture with the $25m Australian listed Magmatic Resources, with its copper and gold project Corvett, 60km north of Northparkes.

This was the area where Evolution Mining last year bought a gold mining asset from CMOC for about $700m.