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Lundin Mining Corp said on Monday it would buy sister firm Josemaria Resources Inc in a cash-and-stock deal worth $625-million, sending shares of the Canadian miner down nearly 15 per cent.

Through the acquisition, Lundin Mining will gain Josemaria’s silver-copper-gold project in Argentina, a country many experts consider as having great untapped mineral wealth. Its Latin American operations are currently in Chile and Brazil.

Both companies are part of Lundin Group, which also includes other individually managed public businesses such as Lundin Gold and Lundin Energy.

The Canadian miner said the deal equates to 30 per cent in cash and 70 per cent in Lundin Mining shares. It implies a purchase price of $1.60, a 31.1 per cent premium to Josemaria’s last close, according to a Reuters calculation.

Shares of Josemaria rose 18 per cent to $1.44.

Once in production, Lundin said Josemaria is expected to produce on average more than 130,000 tonnes of copper, nearly 225,000 ounces of gold and 1 million ounces of silver annually over a 19-year mine life.

This growth would increase Lundin’s copper production by nearly 50 per cent and gold production over 140 per cent, compared with its 2022 outlook.

In February, Lundin Group had said it plans to begin operating the Josemaria project 2026, after an investment of $3.09 billion.

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