BHP and Lundin Mining have agreed to jointly acquire Filo, the owner of the Filo del Sol (FDS) copper project in Argentina, in a deal worth about C$4.1bn ($2.96bn).
Filo, which is listed on the Toronto Stock Exchange (TSX), is a Canadian exploration and development company.
Under the terms of the deal, shareholders of Filo have the option to receive cash, Lundin Mining shares, or a mix of both.
BHP’s portion of the Filo acquisition consideration will be about $1.4bn in cash. Lundin Mining will contribute nearly C$859m ($620m) in cash, along with C$1.3bn ($931m) worth of its shares.
Besides, BHP and Lundin Mining have agreed to subscribe for 3.4 million common shares of Filo at a price of C$33 ($23.84) per share for aggregate gross proceeds of C$115m ($83m).
Following the closing of the deal, BHP and Lundin Mining will form a 50-50 joint venture (JV) to hold the FDS copper and Josemaria copper-gold-silver projects, both located in the Vicuña district spanning Argentina and Chile.
The Josemaria project is currently 100% owned by Lundin Mining. The JV aims to jointly develop an emerging copper district with world-class potential, establishing a long-term partnership.
BHP will acquire a 50% stake in the Josemaria project from Lundin Mining for cash consideration of about $690m.
The JV also intends to utilise the advanced engineering and permitting stages of the Josemaria project to advance the combined FDS and Josemaria projects on a phased development timeline.
This approach aligns with improving investment conditions in Argentina and addresses the copper demands of the global energy transition, said the companies.
BHP CEO Mike Henry said: “The proposed transaction builds on a multi-year relationship between BHP and the Lundin Group of companies through which we have developed a strong understanding of the resource potential of the Vicuña district and the possible pathways for development of the Filo del Sol and Josemaria projects.
“This transaction aligns with BHP’s strategy to acquire attractive early-stage copper projects and enter into strategic partnerships with parties where complementary skills and experience can deliver long-term economic and social value.”
Subject to Canadian court approvals along with regulatory, securities and stock exchange approvals, and other customary conditions, the deal is expected to be completed in Q1 2025.
