Canada’s Lundin Mining has exercised its option to acquire a further 19% stake in SCM Minera Lumina Copper Chile, the owner of the Caserones copper-molybdenum mine, for $350m (C$479.05m).
This deal is expected to be finalised around 2 July 2024 and would raise Lundin's stake in the mine to 70%.
The agreement between Lundin and JX Advanced Metals will amend the original shareholders' agreement, allowing Lundin to exercise the call option early.
This grants Lundin rights to 70% of the distributions from 1 January 2024.
Upon closing, Lumina Copper will declare an estimated cash distribution of $150m, with Lundin receiving a 70% share.
Additionally, the annual operator fee that Lundin receives as part of the shareholders' agreement with JX will increase from $21m to $28m from 2025.
The $350m purchase price will be initially covered by Lundin Mining’s revolving credit facility, with plans to refinance by increasing the current $800m term loan to $1.15bn.
The Caserones mine is estimated to produce between 120,000t and 130,000t of copper and between 2,500t and 3,000t of molybdenum in 2024, on a 100% basis.
The production guidance for 2025 and 2026 remains at 125,000–135,000t of copper annually.
The cash cost for 2024 is projected to be between $2.60 per pound (lb) and $2.80/lb of copper, factoring in byproduct credits and assuming an average molybdenum price of $20/lb.
Lundin Mining president and CEO Jack Lundin said: “We are pleased to expand our ownership in a long-life operation characterised by robust cash flow generation, further enhancing Lundin Mining’s presence in the region and strengthening our overall copper-dominant portfolio of high-quality base metal mines.
“Exercising our option early provides significant benefits to both parties: we secure additional copper production at an attractive acquisition price, while our partners receive an upfront payment and retain a meaningful 30% equity position in Caserones.
“This strategic move underscores our commitment to disciplined, scalable copper growth.”
