Polish KGHM, Abacus Moves Ahead On Joint Venture In Canada

Polish copper miner KGHM Polska Miedz SA (KGH.WA) and Canada's Abacus Mining & Exploration Corp. (AME.V) have formed a joint venture to develop the Afton Ajax copper and gold field, KGHM said in a statement Tuesday.

KGHM, Europe's No. 2 copper producer, first agreed to pay $37 million for 51% of the joint venture in May. Abacus contributes its rights to the Afton Ajax field in British Columbia, Canada.

KGHM has the option to acquire a further 29% in the joint venture for up to $35 million; if it exercises the option, it will be required to organize financing for the joint venture's investment in the field.

The Polish company's Canadian expansion is part of its strategy of boosting copper output to 700,000 tons a year by 2018. In 2009, KGHM produced 501,000 tons of copper.

According to estimates, the Afton Ajax field, with 442 million metric tons of copper ore, can produce about 50,000 tons of copper and more than three tons of gold a year. The field is expected to produce for 23 years starting in 2013, KGHM said.

-By Marynia Kruk, Dow Jones Newswires; [phone]; [e-mail]