Mining giant Xstrata is hoping to expand its operations at the Ernest Henry mine in Queensland by buying two copper tenements from Exco Resources.
The $175 million deal with the copper exploring and gold mining Exco Resources will see Xstrata as the new owners of the E1 and Monakoff temenents located near Cloncurry in north western Queensland.
Steve de Kruijff the chief operating officer of Xstrata Copper's North Queensland division said that they anticipated that the development and operation of the E1 and Monakoff copper projects will create around 100 full-time jobs, some of which will be sourced from Ernest Henry's existing open pit workforce.
Exco Resources saw its shares jump 10.5% after the deal was announced. They climbed up from 6.5c to 68.5c yesterday. This is the highest that the shares have been since the company was listed in 1998. They had weeks ago denied rumors of a takeover by the Anglo Swiss mining giant.
The company had said that it would have found the project too costly to develop by itself. The board of directors has endorsed the sale of the tenements and a shareholder meeting is expected in June. The deal is still subject to approval from shareholders and the government.