Altona Mining has concluded agreements with Sichuan Railway Investment Group (SRIG) to create a joint venture (JV) to build a new copper-gold mine at Cloncurry project in north-west Queensland, Australia.

The project will be owned by JV company Roseby Copper, which will have $238.53m at closing.

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SRIG will contribute $213.53m for the project, while Altona will offer $25m.

The project is fully funded with A$329m ($242m). SRIG will own 66% and Altona to hold 34% of the JV company.

"This financing structure delivers higher and more immediate returns to Altona shareholders."

The companies propose to develop an open-pit mine and flotation plant with a capacity of seven million tonnes per year to produce 39,000t per annum copper and 17,000oz gold over an initial mine life of 11 years.

Altona will manage Roseby Copper for three months from its establishment.

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The company’s 34% equity share of annual production from the Cloncurry project is equal to around 13,000t of copper and 5,780oz of gold.

Altona Mining managing director Dr Alistair Cowden said: "This financing structure delivers higher and more immediate returns to Altona shareholders compared to conventional debt/equity mining project financing structure.

"We have chosen to dilute at the project level, not at the company level. Altona avoids large dilutive equity raisings, debt, debt service taking precedence over shareholder dividends, mandatory hedging, which caps the copper price upside and bank covenants limiting the ability to grow.

"The project is significant for Queensland bringing approximately 300 construction jobs and when in production it will sustain approximately 280 new direct jobs."

The transaction is expected to close on 31 October this year.