Exco Shareholders OK Sale Of Cloncurry Copper Project To Xstrata

Exco Resources Ltd. (EXS.AU) on Thursday approved the A$175 million sale of its Cloncurry copper project in northern Queensland to Xstrata PLC (XTA.LN).

At an Exco general meeting, 71% of the company voted in favor of the deal, said Managing Director Michael Anderson. A simple majority of more than 50% of votes cast was needed to clear the sale.

Xstrata has received confirmation from Australia's Foreign Investment Review Board that it has no objections to the Cloncurry sale, Exco said in a statement.

Settlement is scheduled on or before July 31, clearing the way for Xstrata to expand production at its Ernest Henry mine from the second half of next year by accessing the Cloncurry deposits.

Cloncurry, with resources of 401,000 metric tons of copper and 384,000 ounces of gold, will make an "incremental" contribution to Ernest Henry's production as the operation transitions from open cut to underground mining operations, Xstrata said.

Unveiled in April, the sale was initially clouded by Exco's largest shareholder, Ivanhoe Australia Ltd. (IVA.AU), withholding its backing over concerns that not enough cash would be returned to shareholders.

But earlier this month Exco revealed it would increase the cash return to A$135 million, a move supported by Ivanhoe.

-By Stephen Bell, contributing to Dow Jones Newswires; 61-8-9244-4243; [e-mail]