Canadian mining company First Quantum Minerals has signed a definitive agreement to acquire Lumina Copper for $470m.
First Quantum will acquire Lumina Copper through a court-approved plan of arrangement by purchasing all of the outstanding securities of Lumina; the company currently owns 2.5 million of Lumina's outstanding common shares.
Lumina owns TacaTaca copper mine, which is located in the Puna region of the Salta Province in Argentina.
First Quantum chairman and CEO Philip Pascall said that the acquisition of Lumina is another step in First Quantum's objective of geographical diversification through the acquisition of world-class, early-stage copper assets.
"TacaTaca will significantly add to First Quantum's development pipeline and is at the stage where we can apply our resources and development expertise to realise its full potential and further add to First Quantum's copper production profile," Pascall said.
First Quantum will offer Lumina shareholders three per-share options of: $5 in cash and 0.2174 of a First Quantum common share; $0.01 in cash and 0.4348 of a First Quantum common share; or $10 in cash, if the total cash amount Lumina shareholders elect to receive exceeds $222,391,175.
Lumina founder and largest shareholder Ross Beaty said: "This transaction provides Lumina shareholders with the option to retain exposure to TacaTaca's future development in the hands of a world-class mine development and operating team, through ownership of First Quantum's shares."
TacaTaca has an indicated mineral resource estimate of 21.15 billion pounds of copper, which is contained in 2.17 billion tonnes grading at 0.44% copper, 0.08g per tonne of gold and 0.013% molybdenum. The inferred mineral resource estimate is 7.55 billion pounds of copper contained in 921 million tonnes, grading at 0.37% copper, 0.05g per tonne of gold and 0.012% molybdenum, using a 0.3% copper equivalent cut-off.
"Once the acquisition of Lumina has been completed, we will immediately review the TacaTaca project to determine the most efficient and economical timing for its development in the context of the projects that we are currently developing," Pascall added.
The deal is currently subject to approval from the Supreme Court of British Columbia. If it is not concluded, Lumina will be liable to pay First Quantum a termination fee of $16.25m.