By Robb M. Stewart
MELBOURNE--Altona Mining Ltd. (AOH.AU) said Monday that it has
begun negotiations with Anglo-Swiss mining giant Xstrata PLC
(XTA.LN) about selling majority control of a project in eastern
Australia that has the potential to produce 39,000 metric tons of
copper and 17,000 troy ounces of gold a year.
Altona said in a statement that it has been notified that
Xstrata intends to exercise an option it holds to acquire a 51%
interest in the Little Eva project, a portion of the wider Roseby
project in Queensland state.
Altona's shares jumped on the news and were trading 21% higher
at A$0.29 at 0205 GMT.
"The decision by Xstrata demonstrates the attractiveness of
Roseby and in particular of Little Eva," said Alistair Cowden,
Altona's managing director.
The greater Roseby project covers 1,550 square kilometers in
area that may contain copper, gold, zinc and uranium.
The notice from Xstrata kicks off a formal process in which the
two companies will seek to reach an agreement on a price for the
sale, Altona said. If they fail to reach an agreement, they may
turn to an independent expert to determine the price.
Altona, which is listed on the Frankfurt stock exchange and the
Australian bourse, has an underground copper mine and processing
plant in Finland.
Write to Robb M. Stewart at robb.stewart@wsj.com