South32 has sold four non-core base metals royalties to London Stock Exchange-listed Anglo Pacific Group, unlocking up to $US200m ($296.3 million) in additional value.
The base metals royalties are across third-party interests in a mix of producing and development stage assets and include OZ Minerals’ West Musgrave copper-nickel project and Cyprium Metals’ Nifty copper project in Western Australia.
South32 has also sold its royalties in Capstone Copper Corporation’s Santo Domingo copper project in Chile and KGHM Polska Miedz’s Carlota copper mine in the US.
The total sale price comprises $US185 million ($274.1 million) of fixed consideration, including $US103 million ($152.6 million) in cash payments and $US82 million ($121.5 million) of Anglo Pacific shares, which will be issued to South32 on completion of the deal.
Contingent payments of up to $US15 million ($22.2 million) are also included in the transaction.
Following completion, South32 will hold an approximate 16.9 per cent interest in Anglo Pacific.
South32 chief executive officer Graham Kerr said the transaction was a coup for the major miner.
“Today’s sale of another non-core royalty package is a further step forward in unlocking latent value from our portfolio,” he said.
“The proposed transaction will realise an immediate cash payment, while also retaining long-term exposure to these royalties through our shareholding in Anglo Pacific.
“Following the sale, we still retain an exciting package of 36 royalties at different stages of maturity, weighted towards base metals.”
South32’s existing 36 royalties include net smelter return (NSR) royalties over EcuaCorriente SA’s Mirador mine, ExplorCobres SA’s San Carlos/Panantza project, and Solaris Resources’ Warintza project, which are all located in Ecuador.
There are no conditions underpinning the transaction, with completion expected within five business days.