Chinalco Yunnan Copper to buy Xstrata projec

Chinalco Yunnan Copper Resources Ltd. said Thursday it has agreed to buy mining giant Xstrata PLC's early-stage Humito copper exploration project in northern Chile.

The agreement calls for Chinalco Yunnan to commit to minimum spending and drilling each year for five years, after which it will buy 100% of the project while Xstrata's copper subsidiary will retain a 3% net smelter royalty.

"We aim to drill this property after completing initial drill programs on our Candelabro, Caramasa and Palmani targets further north in Chile," said Jason Beckton, managing director of Chinalco Yunnan.

The Humito copper and molybdenum prospect is located in the palaeocene porphyry copper belt of northern Chile, 60kilometers north of the town of Copiapo and near Chinalco Yunnan's fully-owned Humito property

Chinalco Yunnan's largest shareholder with a 21% interest is a majority-owned unit of Aluminum Corp. of China, or Chinalco. The Brisbane-based company last month signed an deal to partner with Rio Tinto PLC (RIO) on a project in northern Chile, its third such agreement for the region with the Anglo-Australian mining company.