Under the terms of agreement, SMM and SC will form a 70:30 joint venture in Chile subscribing to 45% of the shares of Quadra FNX’s subsidiary Minera Quadra Chile, which owns the project.
In return, Minera Quadra Chile will invest $724m in the development of the project.
The Sierra Gorda project has total mineable reserves of about 1.3 billion tons, 5Mt of which is copper.
The mine has a life span of 20 years with an average annual production of 730,000t of copper and 22,000t of molybdenum concentrate.
The project is scheduled to commence production in 2014.