Ground Breakers: BHP-OZ a done deal, Argosy on cusp of becoming second ASX-listed battery lithium carbonate producer

BHP announces scheme implementation deed as OZ Minerals takeover becomes a done deal
Bellevue Gold draws down on debt, says plans are tracking on time and budget at Bellevue gold mine
Argosy announces confirmation of battery grade lithium carbonate at Rincon lithium project

Earlier this week BHP (ASX:BHP) extended its due diligence on takeover target OZ Minerals (ASX:OZL) to December 27.

It didn’t need it. The Big Australian likes what it’s seen under the hood at OZ, with both sides announcing a scheme implementation deed to sell the mid-tier copper and gold miner for $9.6 billion, or $28.25 per share.

The price, unanimously recommended by OZ’s board, is good news for anyone with the foresight to have bought into OZ at the copper market’s ebb a decade ago.

OZ was trading for a little over $3 a share before former Rio executive Andrew Cole took over in 2014. It has since grown to become the main vector for pure play copper exposure on the ASX, hitting a high of over $30 per share early this year.

The exit of OZ from the bourse, at a handsome gain for most of its investors, leaves a bit of a hole where that is concerned.

No mid-tiers aside from Sandfire Resources (ASX:SFR), which is in a serious transition phase, have the same sort of scale on the ASX and Rio and BHP’s copper assets are secondary to the main driver of their share price – iron ore.

READ: Are these copper stocks in pole position to move once China gets over its Covid hang-up?

The deal provides BHP with optionality around its Olympic Dam mine and smelter, with OZ’s Prominent Hill and Carrapateena deposits in close quarters, along with BHP’s large Oak Dam IOCG discovery.

“The combination of BHP and OZL’s assets, skills and technical expertise provides a unique opportunity not available under separate ownership, with complementary resources including the Oak Dam exploration prospect and existing facilities within close proximity, backed by BHP’s strong balance sheet, capital discipline and commitment to sustainable development,” BHP CEO Mike Henry said.

“We thank the OZL Board and management for their engagement through the due diligence process and look forward to working together to continue to take steps forward to complete the transaction.”

A scheme meeting of OZ shareholders to approve the deal will be held in late March or early April next year.

OZ Minerals (ASX:OZL) and BHP (ASX:BHP) share prices today:

Bellevue draws down on Macquarie loan as new gold mine ramps up

Bellevue Gold (ASX:BGL) says it remains on time and on budget at its new gold operation of the same name in the Northern Goldfields of WA.

The emerging ASX 200 gold miner, which owns the high grade underground development where it plans to produce around 200,000ozpa for a decade and boast one of the lowest carbon intensities in the gold sector, announced the first $35m draw down on its project loan facility with Macquarie today.

BGL says it remains fully funded, with $142m cash in the bank and $307m of total liquidity.

“We are in a strong position with the project running comfortably on time and on budget. The strong progress made in recent months, combined with the proceeds of the raising, has enabled us to continue pushing ahead at a rapid pace, further de-risking the project from both a production and timetable perspective,” BGL MD Steve Parsons said.

A third underground jumbo drill rig, used to prepare rock faces for blasting, has been mobilised to the site by Bellevue’s contractor Develop (ASX:DVP), and is due to start work in January to develop access in the Marceline area.

A tender for the open pit and a second box cut at Tribune is due to be awarded next month.

The mine is expected to pour first gold in the second half of 2023.

Bellevue Gold (ASX:BGL) share price today:

Lithium production tantalisingly close for Argosy

Argosy Minerals (ASX:AGY) has spent the better part of 2022 quietly building its 2000tpa Rincon project in Argentina, where it is taking a staged approach to brine production.

Today it delivered another milestone, confirming the production of battery quality 99.76% lithium carbonate during commissioning.

The Jerko Zuvela led miner says the news validates its chemical processing technology, which places it on track to become just the second ASX-listed battery lithium carbonate producer after Allkem (ASX:AKE).

Argosy plans to ramp up production over the March quarter, with steady-state production expected by the end of the June quarter in 2023.

“This is a significant milestone for the Company and our onsite Puna Mining operations team, all who have been working extremely hard for this achievement. We are extremely proud to have built the 2,000tpa operation under budget and successfully proven our clean lithium process technology on a commercial scale, specially developed for our Rincon Lithium Project,” Zuvela said.

“The Company will now look to complete the 2,000tpa operation commissioning works and progress with ramping-up toward steady-state production operations and producing battery quality lithium carbonate product.

“The lithium market and lithium carbonate prices are forecast to continue around record highs into 2023 and beyond, resulting in very lucrative upcoming product sales revenues.”

Lithium prices have experienced a slight pullback in recent weeks and plateau in China, on concerns EV demand could wane amid lockdowns and an end to China’s EV subsidies next year.

But the S&P Platts lithium carbonate price CIF North Asia is currently trading at US$75,500/t, levels that would be extremely profitable for virtually every producer.