Altona Mining has to go it alone or find a new partner to develop its Queensland copper project after global miner Xstrata changed its mind and decided not to buy a majority stake in the project.
Last year Xstrata indicated it would exercise its option to buy a 51 per cent stake in Altona's Roseby copper-gold project in the state's north-west.
However the two parties could not agree on a price for Roseby - estimated by brokers to be worth $100 million to $180 million - even after an independent valuer was brought in, with Altona announcing Xstrata's exit on Tuesday.
Investors lost confidence in the stock, sending Altona's shares three cents, or 10.7 per cent, lower to 25, with a market capitalisation under $150 million.
Roseby had strategic value for Xstrata, being located less than 100km away from its own Mt Isa-Ernest Henry mines in the region.
Altona's managing director Alistair Cowden rejected any suggestion the result threatened Roseby's hopes of being developed.
He described the Xstrata option as having been a burden for seven years and thought more value could be unlocked for shareholders by not being a part of Xstrata's giant machine.
"I don't see this as a disaster or anything," he told AAP.
"Xstrata saw it very much through the prism of feed to go through their Ernest Henry mill ... but it's not a high grade asset and you would have had to `high grade' the ore."
If a processing facility was now built at Roseby, it would have strategic value, with copper and gold not having to be transported 100km away, possible new discoveries and other junior resources companies digging around the region.
Altona was recently awarded Queensland Explorer of the Year Award by the state government for its discoveries around Roseby.
However getting it into production will now take longer as building the mine will take 18 months, excluding interruptions during the wet season.
Dr Cowden said his preferred option was a larger partner rather than diluting shareholder wealth by raising capital and going it alone.
Other options were selling it or a merger with a mid-tier company at a more mature stage of its development and looking for a growth project.
Altona plans to develop a 39,000 tonnes of copper a year mine plus 17,000 ounces of gold, with the asset containing 1.5 million tonnes of contained copper and 400,000 ounces of gold, Dr Cowden said.
Foster Stockbroking has a buy recommendation on the stock, pointing out that copper prices were strong and it was feasible for Altona to still develop the project, albeit in a possibly smaller, staged way.