DESPITE a somewhat troubled early existence, Queensland’s Lady Annie copper project is headed toward a bright future. Lady Annie is owned by CST
Mining Group, an international copper mining company listed on the Hong Kong Stock Exchange, and the project has moved from strength to strength since CST took ownership in 2010.
The Lady Annie operation comprises a mining area of the same name, a second mining area known as Mount Kelly, and the Mount Kelly processing plant and
tenements. In addition to owning and operating Lady Annie, CST is developing the Marcona Mina Justa copper project in southern Peru. CST also owns a 9.9 per cent stake in Hong Kong-listed G-Resources Group, whose primary asset is a 95 per cent equity interest in the Martabe gold and silver project in Indonesia.
In its most recent interim report, CST announced total revenue of about US$91.13 million for the six months to September 30, 2011 – an increase of about US$87.88 million on the corresponding period of the previous year. According to the report, the Lady Annie operation contributed about 97.55 per cent of the company’s total revenue for the period.

Lady Annie’s path to its current owner was turbulent: a victim of both the preandpost-GFC markets, the mine changed hands multiple times before CST took
ownership. Lady Annie was originally owned by CopperCo, but was acquired by WA mining company Cape Lambert in February 2009. CopperCo had failed to retire a $45 million debt facility with Macquarie Bank and was placed in administration when Cape Lambert beat other eager would-be buyers in its purchase of Lady Annie, and some of CopperCo’s other assets, for about $106 million.
Following its purchase of Lady Annie, Cape Lambert announced that it had contracted a drilling company to begin a two-year exploration program on site to upgrade and expand the project’s defined resource.
The mining company had announced plans to sell off the mine as part of a proposed $214 million Initial Public Offering (IPO) of a copper company it had created, called Q Copper, which was designed to act as a vessel for Lady Annie. At the time, Cape Lambert executive chairman Tony Sage said the awarding of
the drilling contract prior to the listing of Q Copper was in line with the company’s strategy of ensuring exploration began at Lady Annie as soon as possible to enable additional mine life to be crystallised prior to its sale.
Unfortunately the planned Q Copper float fell victim to the nervous market of late 2009, and the IPO was not completed. A second attempted IPO in January
2010, with a revised prospectus, met with another market slump and was also abandoned.
Shortly after the second failed IPO, CST Mining (then trading as China Sc-Tech Holdings) approached Cape Lambert with an offer to purchase Lady Annie. In March 2010, an official statement was released announcing the $135 million sale, which was finalised in June. At the time, Mr Sage said the mine’s sale was a better outcome than the previously planned float of Q Copper.
“In the end we felt a trade sale was the best outcome for shareholders and stakeholders, given capital markets remain choppy and may continue to do so for the
medium run,” he said in a statement. “The sale of Lady Annie inside 12 months provided the company with an immediate return of approximately 52 per
cent on its investment.“Coupled with the disposal of non-core shareholdings for $28 million earlier in the year, cash realisations now exceed the acquisition cost of the entire portfolio of CopperCo assets.”

The Lady Annie copper mine and processing facility lie 120km northwest of Mount Isa in Queensland. The operation comprises open-pit mining, agglomeration, stacking, heap leaching, solvent extraction and electrowinning, with a total production capacity of 30,000 tonnes per annum of London Metals Exchange A-grade copper cathode.
Lady Annie lies within the Mount Isa Inlier, which contains numerous world-class base and precious metals ore bodies. CST has reported that the potential for additions to resources and reserves is excellent in and around the existing ore bodies on its highly-prospective exploration tenements.
In January 2011, CST released its full 2011 production guidance for Lady Annie of between 24,000t and 25,000t of copper cathode at an estimated cash cost of between US$1.50 and US$1.60 per pound of copper, based on an exchange rate of US$0.95 to A$1.


By Amy Mattes-Harris