Base metals producer Kagara Zinc Ltd has negotiated a four month exclusive option to purchase the Thalanga treatment plant for $2 million from Thalanga Copper Mines.
The treatment plant is located near Charters Towers in North Queensland.
Kagara will use the Thalanga plant to treat the bulk of the resource of 3.3 million tonnes at 3.9 per cent copper already defined at the Balcooma deposit.
The company believes the acquisition may result in the production of more than 35,000 tonnes of copper per annum by 2007/08.
Kagara will initially pay a $400,000 option fee - to be deducted from the purchase price if the option is exercised - for the plant, which has been on care and maintenance since August 2005, plus the underlying tenements and resources.
During the option period Kagara will address various issues including an environmental assessment and finalisation of detailed mine design and production scenarios for Balcooma as well as more accurately quantifying pre production capital and operating costs.
If the option is exercised, Kagara will immediately pay a further $600,000 with the remaining $1 million to be paid by the end of September.
Production is expected to commence by September at 20,000 tonnes of copper concentrate per annum.
The Balcooma operations would build on Kagara's existing operations at Mt Garnet, located near Mt Isa.
