Lundin Mining Corp said on Monday it would buy Josemaria Resources Inc in a cash-and-stock deal worth C$625 million ($483 million), sending shares of the Canadian miner down nearly 12%.
Through the deal, Lundin Mining will gain access to the Josemaria copper-gold project located in the major mining centre of San Juan Province in Argentina. The company’s Latin American operations are currently in Chile and Brazil.
The Canadian miner said the deal equates to 30% in cash and 70% in Lundin Mining shares. It implies a purchase price of C$1.60, a 31.1% premium to Josemaria’s last close, according to a Reuters calculation.
Shares of Josemaria jumped 21% to C$1.48.
Once in production, Lundin said Josemaria is expected to produce on average more than 130,000 tonnes of copper, nearly 225,000 ounces of gold and 1 million ounces of silver annually over a 19-year mine life.
This growth would increase Lundin’s copper production by nearly 50% and gold production over 140%, compared with its 2022 outlook.
($1 = 1.2940 Canadian dollars)
(Reporting by Arunima Kumar in Bengaluru; Editing by Ramakrishnan M.)
