Lundin Mining is set to acquire an additional 19% interest in SCM Minera Lumina Copper Chile (Lumina Copper), the operator of the Caserones copper-molybdenum mine in Chile, from JX Advanced Metals for $350m.
For this, the Canada-based base metals mining company will exercise an option that it had secured in March 2023. At that time, Lundin Mining acquired an initial 51% stake in the Chilean copper-molybdenum mine for $950m.
Following the latest deal, Lundin Mining will increase its ownership in the Caserones copper-molybdenum mine to 70%. The transaction is anticipated to be completed on or around 2 July 2024.
The agreement between Lundin Mining and JX Advanced Metals will amend the original shareholders’ agreement, allowing the former to exercise the call option early.
Following the closing of the call option, Lumina Copper will declare a distribution of cash estimated to be around $150m. Of this, 70% will be distributed to Lundin Mining and 30% to JX Advanced Metals.
Lundin Mining plans to initially fund the purchase price from its revolving credit facility. It will be re-financed by increasing the current $800m term loan to $1.15bn.
Lundin Mining president and CEO Jack Lundin said: “We are pleased to expand our ownership in a long-life operation characterised by robust cash flow generation, further enhancing Lundin Mining’s presence in the region and strengthening our overall copper-dominant portfolio of high-quality base metal mines.
“Exercising our option early provides significant benefits to both parties: we secure additional copper production at an attractive acquisition price, while our partners receive an upfront payment and retain a meaningful 30% equity position in Caserones.”
The Caserones mine is located in the Atacama Region. On a 100% basis, the open pit copper-molybdenum mine is estimated to produce between 120,000 tonnes and 130,000 tonnes of copper and between 2,500 tonnes and 3,000 tonnes of molybdenum in 2024.
