Hudbay Minerals has signed an agreement to acquire a minority joint venture interest of 7.95% owned by United Copper & Moly (UCM) in the Rosemont copper project in the US for $75m.
Under the agreement terms, Hudbay will also terminate all of UCM’s remaining earn-in and off-take rights associated with the mine, which has not yet been built.
The latest development comes after Hudbay received a Section 404 water permit from the US Army Corps of Engineers for Rosemont, a key environmental approval required for construciton at the mine to begin.
In connection with the transaction, Hudbay is set to release UCM from all obligations in relation to the project, including project loans. Korea Resources Corporation and LG International jointly own UCM.
Hudbay Minerals president and CEO Alan Hair said: “There is continued positive momentum at Rosemont as we recently received our section 404 water permit and we look forward to advancing the project into construction as we finalise a prudent financing strategy.
“As part of our financing strategy, we will shortly launch a process to seek a development joint venture partner for Rosemont.
“We expect there will be substantial interest in a minority stake given recent precedent transactions and Rosemont’s unique status as a world-class, shovel-ready copper project in the US.”
Hudbay will simultaneously advance the initial development of Rosemont to ultimately hold about 70% interest in the project and maintain operatorship.
Subject to the approval of the parties’ respective boards of directors and the execution of a definitive agreement, the transaction is expected to conclude not later than 25 April this year.
Over the first ten years of operations of its projected life for 19 years, Rosemont is expected to produce around 127,000t of copper a year.