Lundin Mining unveils its plan to acquire 19% more stake to its existing 51% ownership in Lumina Copper
Lundin Mining, a prominent Canada-based base metals mining company, has announced its intention to further increase its stake in SCM Minera Lumina Copper Chile (Lumina Copper). The company is set to acquire an additional 19% interest from JX Advanced Metals for $350 million, which will elevate Lundin Mining's total ownership to 70% in the Caserones copper-molybdenum mine, managed by Lumina Copper in Chile.
As part of the agreement between Lundin Mining and JX Advanced Metals, modifications to the original shareholders’ agreement have been made to accommodate the early exercise of the call option. Following the completion of the transaction, Lumina Copper is expected to declare a cash distribution estimated at $150 million. Of this distribution, 70% will be allocated to Lundin Mining and the remaining 30% to JX Advanced Metals.
This forthcoming acquisition is a follow-up to a previous deal in March 2023, when Lundin Mining initially secured a 51% stake in the mine for $950 million. The current transaction is expected to be finalized by July 2, 2024, and is facilitated by an option obtained during the initial acquisition. This option allowed Lundin Mining to exercise the call option earlier than initially planned.
The financing for this acquisition will initially be covered through Lundin Mining’s revolving credit facility. There are also plans to refinance this amount by increasing the existing $800 million term loan to $1.15 billion.
Jack Lundin, President and CEO of Lundin Mining, conveyed his satisfaction with the expansion, emphasizing the strategic benefits associated with securing additional copper production at a compelling acquisition price. He mentioned that the early exercise of the option benefits both parties, ensuring Lundin Mining secures additional copper production at an advantageous price, while their partners benefit from an upfront payment and continue to hold a significant equity position in Caserones.
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Located in Chile’s Atacama Region, the Caserones mine is an open-pit operation projected to produce between 120,000 and 130,000 tonnes of copper and between 2,500 and 3,000 tonnes of molybdenum in 2024. This acquisition not only strengthens Lundin Mining’s portfolio, which is dominant in copper, but also underscores its commitment to long-term operations known for their robust cash flow generation.
