OZ Minerals to Pay $250 Million for Carapateena Project; Qantas Hikes Fares

Marcus Jacob
09 Mar, 2011
New York City

Stocks in Australia declined as metals and energy prices eased in international markets. OZ Minerals agreed to pay $250 million to acquire a copper-gold project in South Australia. Resource stocks and banks closed lower in trading.

[R]4:30 PM Sydney – Stocks in Australia declined as metals and energy prices eased in international markets. OZ Minerals agreed to pay $250 million to acquire a copper-gold project in South Australia. Resource stocks and banks closed lower in trading.[/R]

The ASX 200 index declined 0.8% or 40.40 to 4,767.80 and the broader All Ordinaries index fell 39.3 to 4,863.20.

The Australian dollar declined to US$1.006 and traded at 83.41 yen.

Qantas Hikes Surcharge Again

Qantas announced second fuel surcharge in as many months to pass on higher fuel prices to consumer. The airline said it will increase fuel surcharge on flights to Americas, South Africa and India to $150 from $115 and to Europe to $190 from $145.

The surcharge to Asia-Pacific region and Hawaii will increase to $105 from $75.

A month ago the carrier increased prices by 5% and increased fuel surcharge for the first time since January 2008.

OZ Minerals to Acquire Carapateena Project for US$250 million

OZ Minerals agreed to pay US$250 million for an undeveloped project in South Australia near its Prominent Hill mine.

The deal viewed by some analysts fraught with development risk at least was dubbed by OZ Minerals CEO TErro Burgess as “realistic value.”

The Carapateena copper-gold project, first discovered by Rudy Gomez, is thought to have a high amount of copper. According to test wells the rock formation contains as much as 2.2% of copper.

OZ Minerals agreed to pay US$10 million at the signing of deal and US$240 million on the completion of acquisition. Additional US$50 million will be paid when copper, gold, silver or uranium is first produced and a final US$25 million on the first production of rare earths, iron ore and other metals.

Stock Movers

Miners closed lower after metals and energy prices headed down. BHP Billiton declined 59 cents to $46 and Rio Tinto declined $1.53 to $82.38.

OZ Minerals decreaed 3.5 cents to $1.57 after the company agreed to buy the Carrapateena mining project in South Australia for US$250 million.

Newcrest decreased $1.01 to $38.30 after gold price declined $5.35 to $1,424.60 an ounce in New York trading.

Catalpa Resources increased 2 cents to $1.64 after it reported first-half net profit as gold production increased at two mines.

Qantas increased 1 cent to $2.34 after the company said it will increase fuel surcharge on long haul international ticket to protect its margins. The airline chose to pass on higher fuel cost to customers and not eliminate waste in the company operation or lower its executive salaries.

Banks declined. Commonwealth dropped 31 cents to $51.50 and Westpac fell 12 cents to $23.37 and ANZ closed unchanged at $23.77.