Toronto-based Lundin Mining has agreed to purchase the Chapada copper mine in Brazil from Yamana Gold for $800mn in cash, which will increase Lundin's copper capacity by about a quarter.
The acquisition will be paid in cash on closing and will be funded from Lundin's current cash balance and a portion of its $550mn revolving credit facility, the company said today.
Located in Brazil's Goias state, Chapada is expected to produce about 54,500t of copper at co-product cash costs of $1.80/lb copper in 2019, according to Yamana's latest guidance. Yamana will also receive contingent consideration if certain gold price thresholds are met.
The operation comprises three open pits, with traditional truck and shovel operation, an in-pit crusher and a concentrator that can treat sulphide ores at a capacity of 65,000t/day. The mine also produces gold.
Lundin Mining is a diversified Canadian base metals mining company with operations in Chile, the US, Portugal and Sweden, primarily producing copper, nickel and zinc. It also holds an indirect stake in a cobalt operation in Finland.
