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Taseko Mines has agreed to buy a further 12.5% stake in the Gibraltar copper-molybdenum mine near McLeese Lake in British Columbia, Canada, from Japan’s trading house Sojitz.

The mine is operated by a joint venture in which Taseko has a 75% holding and Cariboo Copper holds the remaining 25%.

Cariboo Copper is a JV between Sojitz (50%), Furukawa (25%), and DOWA (25%).

Under the agreement, Taseko will acquire Sojitz’s 50% interest in Cariboo Copper by making a minimum payment of C$60m ($44.29m) over five years.

The deal consideration also includes potential contingent payments based on revenues from the Gibraltar mine and copper prices over the next five years.

Taseko will initially pay C$10m ($7.38m) to Sojitz upon completion of the transaction. The remaining minimum amount is planned to be paid in instalments over the next five years.

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By GlobalData cited Sojitz as saying that the sale comes due to the mine’s declining grades, volatile operations, and increased risk of environmental liabilities.

Sojitz Metals Mineral Resources and Recycling Division executive officer and COO Osamu Matsuura said: “This transaction is consistent with our division’s strategy to transition towards metal recycling and other midstream processing businesses.”

After the deal concludes, Taseko will hold an 87.5% interest in the Gibraltar Mine.

Taseko president and CEO Stuart McDonald said: “This is a logical and beneficial transaction for Taseko, providing immediate 17% growth in our attributable copper production and earnings from mine operations. Gibraltar is a high-quality asset with a long mine life in an excellent jurisdiction.

“The transaction is immediately accretive to Taseko and the deferred payment structure allows us to focus our financial capacity on the construction of the Florence Copper project which we expect to commence later this year.”

Expected to be operational until 2038, the mine has an average annual production of 135Mlb of copper and 2.5Mlb of molybdenum (100% basis).