South32 has signed an agreement to acquire the remaining 83% of issued and outstanding shares of Canadian mineral exploration company Arizona Mining, in an all-cash deal valued at $1.3bn.
Arizona Mining owns the Hermosa project, which is located 80km southeast of Tucson, Arizona and contains the high grade base metals Taylor deposit.
Go deeper with GlobalData
Under the terms of the deal, South32 will offer C$6.20 ($4.69) per share to Arizona Mining, whose directors have backed the proposed transaction and recommended their shareholders to accept the offer.
The transaction is expected to allow South32 to optimise the design and development of the Hermosa project.
South32 CEO Graham Kerr said: “We have been a major shareholder in Arizona Mining since May 2017 and an active participant in the Hermosa project with representation on the operations committee and a nominee on the board of directors.
“Our deep understanding of this high grade resource and surrounding tenement package, and extensive experience at Cannington, makes us the natural owner of this project and ensures we are well positioned to bring it to development, delivering significant value to our shareholders.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe Taylor project is estimated to have measured and indicated mineral resources of 101 million tonnes, at 10.4% zinc equivalent grade and is open at depth and laterally.
In connection with the deal, South32 has agreed to provide a C$70m ($53.03m) working capital facility to Arizona Mining, which comprises an initial tranche of C$40m ($30.3m) following signing and a further C$30m ($22.72m) in multiple tranches.
The facility will be used for working capital and capital expenditure purposes for the Hermosa project.
Subject to shareholder approval, receipt of court orders and other customary conditions, the transaction is scheduled to be completed in the September 2018 quarter.
