TIDMANTO TIDMTTM
RNS Number : 6491U
Antofagasta PLC
31 July 2015
NEWS RELEASE, 30 JULY, 2015
ACQUISITION OF 50% INTEREST IN ZALDIVAR COPPER MINE
Antofagasta plc ("Antofagasta") is pleased to announce that it
has entered into a definitive agreement with Barrick Gold
Corporation ("Barrick") under which Antofagasta will acquire a 50%
interest in Compañia Minera Zaldívar Limitada ("Zaldivar"), and
will become the operator of the Zaldivar copper mine.
Total consideration for the transaction is US$1,005 million in
cash, which consists of US$980 million upon closing, subject to
customary adjustments, and five annual payments of US$5 million per
year, starting in 2016. The transaction will be funded with cash
from Antofagasta's balance sheet, and is expected to be immediately
accretive to Antofagasta's earnings and cash flow per share.
Zaldivar is an open-pit, heap-leach copper mine located in
Northern Chile with over 20 years of operating history. In 2014,
Zaldivar produced approximately 100,000 tonnes of copper at a net
cash cost of US$1.79/lb, and generated US$244 million of income
before income tax. As reported by Barrick, as of December 31, 2014,
Zaldivar has 2.5 million tonnes of contained copper in proven and
probable reserves, which supports a current reserve life of
approximately 14 years, with further upside potential through
exploration. In addition, as of the same date, Zaldivar has gross
assets of US$1.4 billion.
Diego Hernandez, CEO of Antofagasta, commented:
"This transaction is consistent with our strategy to focus on
our core copper mining business, and represents a rare opportunity
to acquire a substantial interest in an established, low-cost
mining operation that generates strong cash flow.
"We are enthusiastic about partnering with Barrick at Zaldivar.
Together, we believe that we are well positioned to enhance the
long-term value of the Zaldivar operation through our collective
best practices. We have consistently been impressed with the
workforce at Zaldivar, and look forward to partnering with them. We
also look forward to exploring other opportunities to collaborate
with Barrick in the future."
Kelvin Dushnisky, Co-President of Barrick, commented:
"We are pleased to reach an agreement with the ideal partner for
Zaldivar. Antofagasta has an outstanding track record of building
and operating mines in Chile, and we see this as the first step in
an ongoing, collaborative partnership."
The transaction is subject to customary regulatory approvals,
and is expected to close in the fourth quarter of 2015.
In connection with the transaction, Citi acted as financial
advisor and Cassels Brock & Blackwell LLP and Bofill Mir &
Alvarez Jana Abogados acted as legal counsel to Antofagasta.
Investors - London Media - London
Andrew Lindsay alindsay@antofagasta.co.uk Carole Cable
antofagasta@brunswickgroup.com
Paresh Bhanderi pbhanderi@antofagasta.co.uk Robin Wrench antofagasta@brunswickgroup.com
Telephone +44 20 7808 0988 Telephone +44 20 7404 5959
Investors - Santiago Media - Santiago
Alfredo Atucha aatucha@aminerals.cl Pablo Orozco
porozco@aminerals.cl
Telephone +56 2 2798 7000 Carolina Pica cpica@aminerals.cl
Telephone +56 2 2798 7000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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