This binding sale and purchase agreement has been signed with global commodities trader Trafigura and Abu Dhabi state investor Mubadala, which jointly own the MATSA.
The complex includes the Aguas Teñidas, Magdalena and Sotiel underground mines, as well as a 4.7 million tonnes per annum (Mtpa) central processing facility at Aguas Teñidas.
Sandfire will retain a life-of-mine concentrate offtake agreement with Trafigura for all of Matsa’s production, as part of the deal.
Sandfire managing director and CEO Karl Simich said: “Base metal assets, which offer this combination of scale, grade, mine life and exploration upside, are extremely rare globally.
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“The MATSA acquisition transforms Sandfire into a first quartile copper producer of global scale and allows us to leverage our skillset to deliver on our growth ambitions to create one of the highest quality and most compelling copper exposures on the ASX.
“The high-quality debt and equity funding package we have secured ensures that we can fully fund the acquisition of this Tier-1 asset while retaining balance sheet flexibility to deliver our Motheo Copper Mine in Botswana and maintain a global exploration programme.”
Sandfire expects the MATSA copper asset to immediately transform it into a leading diversified global base metals producer, and one of the largest copper-focused producers in Australia.
To fund the transaction, the company will issue a $650m debt facility secured by MATSA and undertake a $905m equity raise.
Sandfire also intends to draw down $145m from its existing debt facility and use $215m of its own cash to finance the acquisition.
Post-transaction, the firm anticipates production ranging between 170kt and 194kt of copper equivalent in fiscal 2022.