Australian mining and metals company South32 has concluded the acquisition of the remaining 83% of issued and outstanding shares of Canadian mineral exploration company Arizona Mining, in an all-cash deal valued at $1.3bn.

The completion of the deal follows an agreement signed by the companies in June this year. The amount for the transaction was funded from cash on hand.

“The acquisition of Arizona Mining adds to our portfolio one of the most exciting base metal projects in the industry.”

Under the terms of the deal, South32 offered C$6.20 ($4.69) in cash for each common share held by former shareholders of Arizona Mining.

South32 chief executive officer Graham Kerr said: “The acquisition of Arizona Mining adds to our portfolio one of the most exciting base metal projects in the industry.

“Our deep understanding of the high-grade Hermosa project and surrounding land package, together with our extensive experience at Cannington, positions us well to bring the project to development and deliver significant value to our shareholders.”

Arizona Mining owns the Hermosa project, which is located 80km southeast of Tucson, Arizona and comprises two deposits, the high grade base metals Taylor deposit and the Central deposit, a zinc-manganese-silver manto oxide.

The flagship Taylor deposit is a greenfield development project with a reported resource of 101 million short tons, in measured and indicated mineral resources, at 10.4% zinc equivalent grade.

Following the transaction, Arizona Mining was delisted from the Toronto Stock Exchange (TSX).

South32 will also begin enhancing the design and development of the Hermosa Project, which include conducting optimising studies and commencing the exploration decline in the coming weeks.

The exploration decline will allow drilling to test for extensions and further improve the company’s understanding of the existing high-grade resource.

South32 currently has operations in Australia, Southern Africa and South America and produces bauxite, alumina, aluminium, energy and metallurgical coal, manganese, nickel, silver, lead and zinc.

The company also operates advanced zinc, lead and silver exploration opportunity in North America.