BHP has invested in Filo Mining Corp. as the Canada-based mining company develops its Filo del Sol copper-gold-silver project in Chile.
Through its subsidiary BHP Western Mining Resources International, BHP has tabled a $C100 million ($108.65 million) private placement in Filo Mining, involving the issue of 6.27 million Filo Mining shares priced at $C15.95 ($17.33) a share.
This will see BHP own approximately 5 per cent of Filo Mining’s issued and outstanding common shares.
Proceeds from the placement will go primarily towards the continued development of the Filo del Sol project, which has an after-tax net present value of $US1.28 billion ($1.76 billion).
A 2019 pre-feasibility study suggested the project has an internal rate of return (IRR) of 23 per cent and an after-tax cash flow of $3.23 billion ($4.45 billion). Filo del Sol is expected to produce approximately 67,000 tonnes of copper, 159,000 ounces of gold and 8.65 million ounces of silver on an annual basis.
Filo Mining chief executive officer and president Jamie Beck said BHP’s investment is validation for Filo del Sol’s significant potential.
“I’m pleased to welcome BHP as our newest shareholder and believe their investment is a significant endorsement in our project, team and strategy,” he said. “The private placement provided us with an opportunity to raise funds at a premium to market, limit dilution and minimise our financing costs.
“This secures the next leg of funding required for us to rapidly expand our exploration plans at Filo del Sol as we define this remarkable deposit.”
As part of the placement, BHP has been granted certain participation and top-up rights, enabling the company to maintain its ownership interest from time to time. The two companies will also form a joint advisory committee to share expertise and foster the continued development of Filo del Sol.
Filo Mining said its immediate priority at Filo del Sol was to continue its drill program involving a combination of step-out and resource definition holes.