Falconbridge reports that Swedish-Canadian miner Boliden has completed the off-again-on-again sale of the Lomas Bayas copper mine and the adjacent Fortuna de Cobre copper deposit in Chile.
In mid-May, Boliden reneged on a deal to sell the assets after its financial backers demanded that it retain them as part of a proposed restructuring. The miner had agreed to issue US$251 million in new capital to retire much of its corporate debt and then refinance the rest to reflect its newfound financial strength.
Subsequently, Noranda and Falconbridge filed suit in the Ontario Superior Court of Justice, requesting Boliden’s compliance and/or $250 million in damages. The lawsuit was withdrawn when Boliden agreed to abide by the terms of the original deal.
Under the deal, Falconbridge assumes 100% ownership. In return Boliden receives:
- US$175 million, plus cash balances (US$2.1 million) less outstanding third-party debt obligations (US$112.7 million); and
- US$15 million if Falconbridge exercises its right to retain the Fortuna de Cobre copper deposit before the fifth anniversary of closing.
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The Lomas Bayas copper mine, which has been in production since 1998, is located in the Atacama desert of Northern Chile. During 2000, the operation churned out 51,292 tonnes copper cathode. Falconbridge plans to increase production to full capacity of 60,000 tonnes annually.
The addition of the Chilean assets increases Falconbridge’s total annual copper output by 20% to more than 300,000 tonnes.
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