Polish copper miner KGHM Polska Miedz (KGH.WA) will complete a feasibility study of its copper and gold field project in western Canada by December 2011, the company said Wednesday.

After that, KGHM will decide whether to execute its option of buying a further 29% in the joint venture with Canada's Abacus Mining & Exploration Corp. (AME.V).

Both companies signed an agreement Tuesday, in which KGHM will pay $37 million for 51% of the joint venture. Abacus will contribute its rights to the Afton Ajax field, located in the Canadian province of British Columbia, into the business.

KGHM has the option to buy a further 29% in the joint venture for up to $35 million and, if it exercises the option, it will be required to organize financing of $535 million for the joint venture's investment in the field.

According to estimates, the Afton Ajax field can produce 50,000 metric tons of copper and 100,000 troy ounces of gold a year. The field is expected to produce for 23 years starting in 2013, KGHM said.

-By Malgorzata Halaba, Dow Jones Newswires; +4822 447-2432; malgorzata.halaba@dowjones.com
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