The past year has been transformational for Exco, with the sale of the Cloncurry Copper Project to Xstrata Copper and a stellar performance by the White Dam Gold Project. Exco has established itself as a successful mining business and realised well in excess of A$220M of value. The future for Exco is certainly bright with exceptional exploration potential within the portfolio of tenements in Queensland, sustaining cashflows from the White Dam and Great Australia operations and significant cash reserves.
Without question, the most significant event for Exco this year has been the sale of the Cloncurry Copper Project to Xstrata, a transaction which realised $175M of value for Exco Shareholders and an eight fold return on investment. The Board is pleased to be in a position to return $135M to Shareholders through a combination of a return of capital (subject to a favourable tax ruling from the ATO) and a fully franked dividend (“the distributions”) which we believe demonstrates our commitment to provide real value to you, our Shareholders. The development of the Cloncurry Copper Project was a systematic process of growth, risk mitigation and partnership management to deliver an early stage minimal risk return to Shareholders. Throughout this process, Exco has forged strong and supportive relationships with key stakeholders in the region.
The White Dam Gold Project, a Joint Venture with Polymetals Mining Ltd (ASX:PLY), poured its first gold in April 2010. Since commencement, the Project has consistently outperformed expectations including repayment of the debt financing after just 7 months of production and some 9 months ahead of schedule. The Project’s achievements and milestones have been testament to Exco’s ability to deliver extraordinary returns from modest assets. Exco is indebted to our joint venture partner, Polymetals, whose exceptional performance both in developing and managing the operation has been crucial in the Project’s success. Production rates, costs and margins from White Dam have been above all expectations. Near mine exploration at White Dam is now being undertaken, with a view to extending the life of the project.
Most importantly, Exco is in a strong position to move forward. Post the distributions Exco will have a strong cash base and the prospect of ongoing cash-flow through remaining production from White Dam and our Great Australia royalty entitlements. Ongoing exploration within the Queensland portfolio of exploration tenements and at White Dam will be funded for the near to medium term and Exco is well placed to consider acquisition opportunities. It is our intention to replicate previous success through a combination of structured exploration and innovative acquisition.
I would like to thank my fellow Board members, management, employees and key partners for their dedication and hard work that has delivered such an outstanding outcome for Exco over the past year. I would also like to take this opportunity to recognise the significant contribution that Michael Anderson made to the Company in his role as Managing Director since 2006, particularly through the Cloncurry Copper Project transaction. We wish him all the best for the future.
Finally I would like to sincerely thank all of our Shareholders for their support and encouragement over the past year. We very much look forward to keeping you informed as our plans unfold, and of course remind you can always find up-to-date details of Exco’s activities on the website.