Obscure ASX mining share surges 29% following OZ Minerals copper deal update

The Havilah Resources Ltd (ASX: HAV) share price has jumped out of the gate on Friday.

At the time of writing, the ASX mining share is trading 28.57% higher at 36 cents following a company announcement this morning.

The gains bring its total return to more than 100% over the past three months.

While the announcement itself isn’t price sensitive, its contents in some ways are, seeing as it relates to the potential disposal of a key asset.

In broad market moves, S&P/ASX 300 Metals and Mining Index (ASX: XMM) is currently down 0.25%.

What’s up with this ASX mining share?

Pending the final transaction of its deal with OZ Minerals Limited (ASX: OZL), Havilah advised today that it will hold a general meeting for shareholders on 31 August.

Recall that Havilah and OZ announced back in May the pair had signed a term sheet granting the latter an option to buy the Kalkaroo copper-gold-cobalt project.

The duo then signed definitive agreements on 26 July. However, there’s one final step left in the process and that’s to seek approval from the company’s shareholders.

Havilah’s board supports the proposed transaction as it believes the $205 million offer “produces a significantly better financial outcome and lower risk alternative” than if it were to mine the Kalkaroo deposit itself.

In today’s release, it said:

The contingent consideration, of up to $200 million, [also] provides Havilah with exposure to future Kalkaroo Project upside in the event of mineral resource upgrades and/or copper prices above US$10,000 per tonne.

The Strategic Alliance is a potential catalyst for development of a major new copper mining region in the northeast of South Australia on Havilah’s extensive tenement holdings in the Curnamona Province.

The market has certainly voted in favour of the announcement today and shares have spiked on a volume approximately seven times that of the four-week average.

In the past 12 months, the Havilah share price has gained around 69%.

The post Obscure ASX mining share surges 29% following OZ Minerals copper deal update appeared first on The Motley Fool Australia.

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More reading

• What’s so good about copper anyway?
• How are ASX copper shares performing after Monday’s surge?
• What could another acquisition mean for BHP shares?
• OZ Minerals ‘completely in play’: Broker on BHP takeover bid
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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