South32 has signed a binding agreement to purchase 45 million common shares in Arizona Mining on a private placement basis at $1.79 per share, for a total investment of C$110.3m ($80.7m). 

Upon closing of the placement, South32 will own around 15% of the shares in Arizona Mining. 

In addition to pre-emptive, top-up and anti-dilution rights that enable South32 to maintain its 15% in Arizona Mining, South32 can also appoint one director to Arizona Mining's board provided it maintains a minimum 12.5% interest. 

South32 can also appoint one member to an operations committee, which will direct the operational and technical work relating to the Hermosa Project. This project includes the zinc-lead-silver sulphide site of Taylor Deposit, in Santa Cruz County, Arizona.  

Proceeds from the placement will be used to advance the Taylor Deposit to the feasibility and permitting stage.

"This is a highly prospective project and is another step in our strategy to identify opportunities outside of our current portfolio."

Completion of the placement is subject to meeting a subscription agreement and regulatory approvals, including by the Toronto Stock Exchange.

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South32 chief executive officer, Graham Kerr said: “This is a highly prospective project and is another step in our strategy to identify opportunities outside of our current portfolio.

“We look forward to working with Arizona Mining to progress this project through the feasibility and permitting stage to unlock the Hermosa Project’s full potential.” 

South32 is a metals and mining company with operations in Australia, southern Africa, and South America.

Arizona Mining is a mineral exploration and development company.