Sandfire Resources is set to transform into a leading global copper producer after signing a deal to acquire the Minas De Aguas Teñidas (MATSA) mining complex in Spain from Trafigura and Mubadala Investment Company for $2.57 billion.
MATSA contains three underground mining operations and a 4.7 million tonne per annum central processing facility that produces 100,000 to 120,000 tonnes of copper equivalent per annum.
The transaction will be funded by a $1.248 billion equity raising, with AustralianSuper committing to $120 million of the placement.
“Base metal assets which offer this combination of scale, grade, mine life and exploration upside are extremely rare globally,” Sandfire managing director and chief executive officer Karl Simich said.
“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.
“The high-quality debt and equity funding package we have secured ensures that we can fully-fund the acquisition of this Tier 1 asset, while retaining balance sheet flexibility to deliver our Motheo copper mine in Botswana and maintain a global exploration program.”
Sandfire expects MATSA to be a long life and low-cost operation with around 12 years of mine life remaining based on resources and life extension and exploration potential.
The company stated the transaction will make it one of Australia’s largest copper focussed 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.
Sandfire expects the transaction will be completed in the March 2022 quarter subject to Spanish foreign direct investment and anti-trust merger approval.
The company has agreed to pay a $US300 million deposit for the transaction, with $US100 million to be paid once the share purchase agreement is signed and $US200 to be paid 10 days later.
MATSA is part of Spain’s Iberian pyrite belt which has one of the most significant concentrations of copper-zinc mineralisation globally.
More than $US1.7 billion of capital has been invested into MATSA since 2005.