In this Tuesday's announcement, neither lithium nor nickel were mentioned or harmed, but the market displayed a notable surge in enthusiasm for True North Copper
(ASX:TNC) shares. They skyrocketed by almost 40% following a strategic partnership with Glencore.
This isn't a takeover or merger; those formalities require regulatory approval from ASIC and the ASX. Instead, it's a processing deal that will propel TNC towards its copper ambitions in northern Australia.
True North Copper (TNC) unveiled an alliance with Glencore, the owner of Mount Isa, to facilitate metal production at TNC's Cloncurry copper project in northwest Queensland.
In exchange for a fee, Glencore will process up to 1 million tonnes of copper from TNC's mines at Mount Isa, situated approximately 120 kilometers away. TNC will incur fees and other charges, partially offset by a 20% subsidy from the Queensland government for transporting ore to Mount Isa's facilities.
True North CEO Marty Costello expressed his satisfaction, stating, "Executing binding offtake and toll-milling agreements with an industry major such as Glencore is a significant milestone for TNC and our Cloncurry copper project."
He added, "Glencore has agreed to purchase 100 per cent of the copper metal produced at CCP (Cloncurry copper project), and we can process up to one million tonnes of ore each year through the nearby processing plant near Cloncurry."
While production must precede the full implementation of the agreement, Mr. Costello is confident that True North is well-positioned to reach production. He stated, "CCP is fully permitted, and TNC is on track to soon be in production for copper."
He concluded, "TNC's investment thesis since listing last year has only improved, and we are excited to demonstrate this in the weeks and months to come."
The offtake sales price will align with market copper concentrate prices, with adjustments for penalties, treatment, and refining charges.
In October 2023, Glencore initially announced the closure of its copper operations by 2025, with the smelter continuing until 2030. However, earlier this month, Glencore revealed plans for a transition to full custom smelting, recognising that 60% of the copper concentrate already originates from external sources.
