Aeris Resources, an Australia-based copper ores company, has agreed to acquire Round Oak Minerals from Washington H. Soul Pattinson (WHSP) for A$234m ($166.5m) in a cash and stock deal.
Round Oak Minerals holds a portfolio of copper and zinc assets in Australia. These include the Jaguar zinc-copper underground mine in Western Australia, Mt Colin copper underground mine and Barbara deposit in North-West Queensland, and the advanced stage Stockman copper-zinc development project in Victoria.
The company also has exploration tenements across all sites, which include a foothold into the mineral-rich Mt Isa region in Queensland.
The Jaguar mine comprises the producing Bentley underground mine, the undeveloped Triumph deposit, and the Jaguar and Teutonic Bore mines, which were both operating in the past, but currently under care and maintenance.
Mt Colin, which is a producing asset, has a current planned mine life of nearly two years. It is forecast to yield 12.5kt copper equivalent in the fiscal year 2023 (FY23).
For the Stockman underground project, a final investment decision is expected to be taken in FY23.
Aeris Resources executive chairman Andre Labuschagne said: “This transaction transforms Aeris into a mid-tier copper, gold and base metals producer with multiple operations and exceptional growth potential.
“The Round Oak asset portfolio is an excellent fit with Aeris’ stated strategy to acquire advanced copper, base metals and gold assets in Australia that are strongly cash flow generative with attractive exploration upside.
“The introduction of the Stockman Project provides us with a second long life project, alongside Tritton, to underpin the group’s production into the next decade.”
Aeris Resources will pay A$80m ($57m) in cash and issue 1,466.7 million of its shares, worth A$154m ($110m), to WHSP as consideration.
The copper ores company plans to fund the cash part of the deal via a fully underwritten A$117m ($83.2m) equity raising held through an institutional placement and a 1 for 4.22 pro-rata, accelerated non-renounceable entitlement offer.
After the closing of the deal and the equity raise, WHSP will hold a stake of around 30.3% of Aeris Resources.
WHSP managing director Todd Barlow said: “This transaction represents the culmination of a significant phase of investment in building a substantial base metals business and, through the combination of Round Oak with Aeris, provides a strong platform to continue WHSP’s exposure to copper which is well-positioned to benefit from global trends in electrification and renewable infrastructure.”
The deal is currently anticipated to close on 1 July 2022.
