Korea Panama Mining Corp (KPMC) will buy a 20% equity interest in Cobre Panama copper project located in Panama.
The company will acquire the mine for a total consideration of $155m from Canada-based Inmet Mining, which will now have an 80% stake in the project.
In 2009, Inmet entered into an option agreement with KPMC for the stake purchase, after its former partner Teck Resources opted out. KPMC is a joint venture of LS-Nikko Copper and Korea Resources Corp.
Under the terms of the stake sale, KPMC will continue to fund 20% of the costs, which are expected to reach at least $5bn.
The project received environmental approval earlier in January 2012, which aided KPMC to exercise its option. The transaction is expected to close by the end of next month, reports Reuters.
Inmet said it has been in negotiations will possible buyers as it plans to sell an additional 20% to 40% of the project to help finance its share of the development costs.
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KPMC will also enter into an off-take purchase agreement allowing it to buy 20% of Cobre Panama’s production, under the terms of the deal.
Cobre Panama project is expected to produce 255,000 tons of copper a year over the 30-plus year mine life. The development is also expected to produce sizable volumes of gold, molybdenum and silver as byproducts.