Xstrata Copper has completed its acquisition of the E1 and Monakoff copper tenements in north west Queensland, Australia from Exco Resources Limited for a cash purchase price of AUD 175 million.

The E1 and Monakoff copper tenements are located 8 kilometers east and 21 kilometers south respectively of Xstrata Copper’s Ernest Henry Mine and contain open pit copper mineral resources with completed feasibility studies. Ore from the projects will be transported to Ernest Henry Mine where it will be processed through the existing concentrator. It is anticipated these two new projects will increase Ernest Henry Mine’s production profile from the H2 of 2012 including gold by product credits.

The E1 and Monakoff deposits have a combined JORC compliant resource of 52.1 million tonnes grading 0.77% copper and 0.23 gram per tonne gold at a cut off grade of 0.3% copper for E1 and 0.5% copper for Monakoff.

Mr Steve de Kruijff COO of Xstrata Copper North Queensland said that the acquired projects would strengthen the viability of Xstrata’s Ernest Henry Mine operations in Cloncurry along with the benefits those operations deliver to the local community. This represents 401,000 tonnes of contained copper metal and 384,000 ounces of contained gold metal. The finalization of this acquisition is a significant step towards integrating the development of these projects into our north Queensland business plan.

Mr Kruijff said that we are now working to finalize the necessary government approvals for the projects and expect initial production from the E1 and Monakoff copper projects to commence in the second half of 2012. We anticipate the development and operation of the E1 and Monakoff copper projects will create around 100 full-time jobs, some of which will be sourced from Ernest Henry Mine’s existing open pit workforce. This is in addition to the 330 construction jobs currently underway and 400 long term job opportunities being created in the transformation of Ernest Henry Mine’s open pit operations to a major underground mine and associated magnetite extraction plant.

He said that the E1 and Monakoff copper projects will expand Ernest Henry Mine’s expected production profile by utilizing the remaining capacity of the Ernest Henry concentrator while leveraging other significant synergies available through our existing site infrastructure, equipment and workforce. We will continue to work closely with landowners and other stakeholders as we finalize planning requirements and develop these tenements into operations.