Lundin Mining Corporation has entered into a binding purchase agreement with JX Nippon Mining & Metals Corporation and certain of its subsidiaries to acquire 51% of the issued and outstanding equity of SCM Minera Lumina Copper Chile, a wholly owned subsidiary of JX which operates the Caserones copper-molybdenum mine in Chile.
The transaction will see JX receive upfront cash consideration from Lundin Mining of $800 million. In addition, $150 million in deferred cash consideration will be payable by Lundin Mining in installments over a six-year period following the closing date. Lundin Mining will also have the right to acquire up to an additional 19% interest in Caserones for $350 million over a five-year period commencing on the first anniversary of the date of closing.
This transaction offers Lundin exposure to a major copper mine in Chile, one that boasted a “historical estimate” of 892.1 Mt at an average grade of 0.33% Cu, containing approximately 2.9 Mt of copper in the proven and probable reserve categories and 1,595 Mt at an average grade of 0.29% copper containing 4.583 Mt of copper in the measured and indicated resource categories.
The deal, Lundin says, aligns well with its strategic goals in that it delivers a large-scale, long-life copper operation with favourable cash flow generation. This, it says, complements Lundin Mining’s existing operations and overall copper-dominant portfolio of high-quality base metal mines.
In addition to the potential to expand the known mineralisation through initiating drill programs, Lundin says the proximity of its Candelaria operations (circa-160 km from Caserones) introduces opportunities to realise additional savings and implement effective supply, logistical and management strategies.
Peter Rockandel, CEO of Lundin, said: “Upon closing of the acquisition of Caserones, we add another long-life copper mine of material size and with significant growth potential to our portfolio, in a region in which we have considerable knowledge and experience. The Caserones team has achieved meaningful operational improvements in recent years, and we will work to unlock additional upside through our strong technical resources and existing presence in the region. The initial controlling interest increases our exposure to what we believe is a growing top-tier copper mining district. We retain the option to further increase our ownership over the next few years at an attractive price. The Acquisition further solidifies Lundin Mining’s position as a growing global producer of copper as the world shifts to a lower carbon future.”
Caserones is a significant porphyry copper-molybdenum deposit in the Atacama Region (Region III) of the northern Chilean Andean Cordillera, situated between the Maricunga and El Indio belts and is part of the emerging Vicuña copper district. It is approximately 9 km from the border with Argentina, and at an altitude of approximately 4,500 m above sea level. The operation produces copper and molybdenum concentrates from a traditional open-pit mine and conventional sulphide flotation plant, as well as copper cathode from a dump leach, solvent extraction and electrowinning plant. First copper cathode was produced in 2013, followed by copper and molybdenum concentrates in 2014.
The open-pit operation uses 33 haul trucks loaded by a combination of two electric rope shovels, two hydraulic shovels and two large front-end loaders. The process plant consists of a conventional crush, grind and flotation processing with a nominal capacity of 105,000 t/d, producing both copper in concentrates and molybdenum in concentrates, as well as a solvent extraction and electrowinning plant and leaching facilities for processing oxide and low-grade sulphide ore with a production capacity of 34,500 t/y of cathode. In 2022, the concentrator plant produced 109,100 t of copper in concentrate. In addition, 15,001 t of copper cathodes and 3,100 t of molybdenum in concentrate was produced.
The tailings are managed in two separate facilities. The flotation tailings from the concentrator plant are classified into coarse and fine fractions. The La Brea tailings storage facility, approximately 9 km west of the concentration plant, receives the fines and the coarse fractions are sent to the El Tambo sand stacking facility immediately adjacent to the concentrator plant. Due diligence was performed on the tailings facilities and related infrastructure, led by Lundin Mining’s Technical Services Group.