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Sandfire locks in funding for MATSA acquisition

copper mining

Sandfire Resources has closed an institutional entitlement offer and placement to raise $926 million for its purchase of the Minas De Aguas Teñidas (MATSA) mining complex in Spain.

The MATSA complex acquisition is valued at $2.57 billion, with the placement and institutional entitlement offer delivering the funds needed for the buyout.

According to Sandfire, the placement will raise about $285 million and the institutional entitlement offer $641 million at $5.40 per share.

This represents a 13.2 per cent discount from Sandfire’s share price of $6.22 per share on September 22, a day before the acquisition was announced.

Sandfire’s managing director and chief executive officer Karl Simich said the funding will support the MATSA acquisition along with its Motheo copper mine in Botswana.

“The institutional entitlement offer and placement was very well received and forms an important part of the high-quality funding package we have secured to ensure that we can fully fund the acquisition of this tier-one asset, while retaining balance sheet flexibility to deliver our Motheo copper mine in Botswana and our ongoing global exploration program,” Simich said.

“Base metal assets which offer this combination of scale, grade, mine life and exploration upside are extremely rare globally.

“The MATSA acquisition transforms Sandfire into a first quartile copper producer of global scale and allows us to leverage our skill set to deliver on our growth ambitions to create one of the highest quality and most compelling copper exposures on the ASX.

“Eligible retail investors will have the opportunity to participate in the retail entitlement offer which opens on Thursday, 30 September 2021.”

The placement includes $120 million from AustralianSuper with around 171 million new shares subscribed for under the placement and institutional entitlement offer.

Sandfire is anticipating the shares to be settled on October 4 and commence trading on October 5.

The company stated MATSA will be a long life and low-cost operation with around 12 years of mine life remaining.

MATSA will reposition Sandfire as one of Australia’s largest copper producers with 2022 financial year production of 170,000 to 194,000 tonnes of copper at a MATSA C1 cost of $US0.40 ($0.55) to $0.50 per pound and DeGrussa C1 cost of $US1.00 to $US1.10 per pound.

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