Proactive Investors - Lundin Mining Corporation (TSX:TSX:LUN) is buying a majority stake in the Caserones copper mine located in Chile for about $950 million to increase the Canadian miner’s exposure to the highly desired base metal in a Tier-1 mining jurisdiction.
The company said it has entered into a binding purchase agreement with JX Nippon Mining & Metals Corporation to acquire a 51% stake in SCM Minera Lumina Copper, a subsidiary of JX which operates the Caserones copper-molybdenum mine.
Lundin will pay JX Nippon $800 million as an upfront cash consideration, in addition to $150 million in as a deferred cash consideration in installments over a six-year period following the closing date.
The company said it would also have the right to acquire up to an additional 19% interest in the mine for $350 million over a five-year period starting on the first anniversary of the date of closing.
Lundin said the acquisition delivers a large-scale, long-life copper operation with favorable cash flow generation, complementing its existing operations and overall copper-dominant portfolio of high-quality base metal mines.
It will also enhance its copper production profile, on a pro forma basis increasing its 2022 copper production by 50%, the company said.
“The acquisition further solidifies Lundin Mining's position as a growing global producer of copper as the world shifts to a lower carbon future,” said Lundin CEO Peter Rockandel.
“The Caserones team has achieved meaningful operational improvements in recent years, and we will work to unlock additional upside through our strong technical resources and existing presence in the region.”