BHP and Lundin Mining have announced a joint venture (JV) to acquire Canadian exploration and development company Filo.
Filo has a 100% stake in the Filo del Sol copper-gold-silver deposit in San Juan Province, Argentina, and adjacent Region III in Chile.
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The transaction, which will be executed through a Canadian plan of arrangement, will see Filo shareholders receive a total consideration of roughly C$4.1bn, or C$33 per share.
This marks a 12.2% premium to the company’s last close on 29 July 2024.
Under the agreed terms, Filo shareholders can opt for cash, Lundin Mining shares, or a mix of both.
Post-transaction, Filo shareholders will hold around 11% of Lundin Mining.
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By GlobalDataFilo president, CEO and director Jamie Beck said: “The transaction delivers a 17.4% premium to the unaffected all time high for Filo’s shareholders while offering exposure to the future development of Filo del Sol in addition to Lundin Mining’s high-quality operating portfolio.”
Additionally, BHP and Lundin Mining will provide interim financing to Filo through a C$115 million share placement.
Upon completion, BHP and Lundin Mining will each own 50% of Filo and the Filo del Sol project.
Lundin Mining will also sell 50% of the Josemaria project in the Vicuña district of Argentina to BHP for nearly $690m.
The JV of BHP and Lundin Mining will incorporate the Filo del Sol and Josemaria projects.
This partnership aims to develop a copper district with significant potential in Argentina and Chile.
BHP CEO Mike Henry said: “This transaction aligns with BHP’s strategy to acquire attractive early-stage copper projects and enter into strategic partnerships with parties where complementary skills and experience can deliver long-term economic and social value.
“The joint venture with Lundin Mining will advance the development of the Vicuña district, which offers the potential to become a major contributor to the economy of Argentina for decades to come. At the same time, by partnering with Lundin Mining, BHP is continuing to invest in the growth of a robust mining sector in Canada.”
Earlier this year, BHP was in the news for its £39bn ($50.17bn) buyout bid for Anglo American, which the latter rejected on grounds of complexity and execution risks.
