Industria
Lundin Mining Announces Closing of the Acquisition of Majority Interest in the Caserones Copper-Molybdenum Mine in Chile and Commitments for New $800 Million Term Loan
Teitur Poulsen, Senior Vice President and Chief Financial Officer, added
The Company paid an aggregate of approximately $800 million in cash consideration at closing. Remaining deferred cash consideration of $150 million will be payable in installments over the six‑year period following the closing date. Lundin Mining also has the right to acquire up to an additional 19% interest in Lumina Copper for $350 million over a five-year period commencing on the first anniversary of the date of closing.
A technical report for the Caserones mine titled "Caserones Mining Operation, Chile , NI 43-101 Technical Report on the Caserones Mining Operation" (the "Technical Report") has been prepared and filed today in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects and is available for review under the Company's profile on SEDAR (www.sedar.com) and on the Company's website (www.lundinmining.com).
The Company believes that many opportunities exist to improve upon the life-of-mine plan presented in the Technical Report. Proximity to Lundin Mining's Candelaria operation, approximately 160 km from Caserones, and Josemaria project, approximately 20 km from Caserones, introduce clear opportunities to realize additional savings and implement effective supply, logistical and management strategies not yet reflected in the life-of-mine plan. Further, Lundin Mining believes significant exploration potential exists within the over 58,500 hectares of the Caserones land package in the highly prospective Vicuña District.
Caserones produced 69,704 t of copper and 2,393 t of molybdenum in the first half of 2023 on a 100% basis. Copper production was comprised of 61,333 t of copper in concentrate and 8,371 t of copper cathodes.
Production guidance for the second half of 2023 is 60,000‑65,000 t of copper and 1,500-2,000 t of molybdenum on a 100% basis. Caserones 2023 copper and molybdenum production are expected to be weighted to the first half of the year primarily due to seasonal winter weather operating considerations typically experienced during the third quarter. Implied full-year 2023 production guidance may differ from estimates contained in the Technical Report primarily given results achieved year-to-date and refinement of near-term plans compared to the Technical Report overall effective date of December 31, 2022 . Annual production guidance for Caserones on a 100% basis for both 2024 and 2025 is 110,000-120,000 t of copper and 1,500-2,500 t of molybdenum.
Cash cost for the second half of 2023 is forecast to be $2.30 /lb – $2.45 /lb of copper, after by-product credits, assuming an average price of $20 /lb molybdenum.
Caserones' capital expenditures for the second half of 2023 are forecast to total $110 million on a 100% basis. Of this, capitalized waste stripping and mine development are forecast to be approximately $45 million , mine and mill capital expenditures are forecast to be $30 million , and $25 million is estimated for capitalized tailings storage facilities costs.
The Company has received commitments from ten lenders for a new Term Loan in a principal amount of $800 million , which it expects to use to refinance the drawdown under the existing $1 .75 billion revolving credit facility which was used to fund the upfront cash consideration of the Acquisition. The commitments remain subject to the execution and delivery of definitive documentation in form and substance satisfactory to the Company and the Term Loan lenders and the satisfaction of applicable conditions precedent. It is expected that the Term Loan will have a term of three years from closing thereof, and provide for an additional $400 million non-committed accordion, which would become available upon receipt of additional binding commitments and closing of up to an additional nineteen percent (19%) interest in Lumina Copper and satisfaction of applicable conditions precedent.
It is expected that the Term Loan will bear interest on US dollar denominated drawn funds at an annual rate equal to the Term Secured Overnight Financing Rate plus a credit spread adjustment plus an applicable margin of 1.60% to 2.65%, depending upon the Company's net leverage ratio. It is expected that the Term Loan will be unsecured, save and except for a charge over certain assets in the United States of America , and will have similar covenants to the Company's existing $1.75 billion revolving credit facility.
Upon execution, the Term Loan agreement will be available for review under the Company's profile on SEDAR (www.sedar.com).
Mineral Resources and Mineral Reserves are reported on a 100% basis (Lundin Mining holds a 51% interest) using the 2014 Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves (the "2014 CIM Definition Standards") and have an effective date of December 31, 2022 . The Mineral Resource estimate is based on 1,045 core and reverse circulation drillholes totaling 175,280 m and includes all drilling completed up until the end of 2017.
Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves have not demonstrated economic viability. The Qualified Person responsible for the Mineral Resource estimate is Mr. Paul Daigle , P.Geo., Associate Principal Geologist with AGP Mining Consultants Inc.
The basis for the Mineral Reserve estimate is the ore grade material contained within a set of operational phase designs currently being used at Caserones to guide mining operations. The Qualified Person responsible for the Mineral Reserves estimate is Mr. Kirk Hanson, P.E., Principal Mining Engineer with AGP Mining Consultants Inc.
The Qualified Person responsible for the scientific and technical information contained herein is Arman Barha , P.Eng., Vice President, Technical Services of the Company. Mr. Barha, who is a "qualified person" as defined under NI 43-101, has reviewed and approved the technical information in this news release. For additional information, including with respect to data verification and exploration information, see the Technical Report.
Lundin Mining is a diversified Canadian base metals mining company with operations and projects in Argentina , Brazil , Chile , Portugal , Sweden and the United States of America , primarily producing copper, zinc, gold and nickel.
The information in this release is subject to the disclosure requirements of Lundin Mining under the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below on July 13, 2023 at 14:00 Eastern Time .
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