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Lundin Mining Corp said on Monday it would buy Josemaria Resources Inc in a cash-and-stock deal worth $625-million, sending shares of the Canadian miner down nearly 12 per cent.
Through the deal, Lundin Mining will gain access to the Josemaria copper-gold project located in the major mining centre of San Juan Province in Argentina. The company’s Latin American operations are currently in Chile and Brazil.
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 jumped 21 per cent to $1.48.
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.