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Publish Date : 10-Nov-2014

Canada-based diversified base metals company Lundin Mining has acquired an 80% ownership stake in Candelaria / Ojos del Salado copper mining operations in a deal worth $1.8bn from Freeport-McMoRan. Under this deal, Lundin Mining has acquired mine and supporting infrastructure of the Chilean copper mine. Lundin Mining CEO and president Paul Conibear said, “The completion of the Candelaria acquisition adds another cornerstone asset to the company that will deliver excellent value to shareholders and contribute significantly to growth in production, cashflow and earnings.”

He adds, “We look forward to establishing an excellent reputation in Chile over many years to come as we work closely with our new employees and stakeholders at Candelaria in order to unlock additional value from this high-quality asset. Lundin Mining paid $1.85bn and $52m for cash and non-cash working capital and other agreed adjustments.”

Over a period of next five years, Lundin Mining will pay contingent consideration of up to $200m payable calculated as 5% of net copper revenue in any annual period, if average copper price exceeds $4 per pound. Freeport-McMoRan would likely use $1.5bn from the proceeds for repaying its debt. As of 31 December 2013, Candelaria / Ojos del Salado copper mine is estimated to possess recoverable reserves of four billion pounds of copper and 1.1 million ounces of gold. During the first nine months of this year, the mine registered production of 246 million pounds of copper and 62,000oz of gold.

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