Noranda buys Inmet’s Antamina stake

Inmet Mining (IMN-T) has sold its 3.3% net proceeds interest in the Antamina copper-zinc mine in Peru to Noranda (NRD-T) for US$22.5 million.

The acquisition was made under the pair’s “put-call” agreement inked in February, but won’t boost Noranda’s 33.75% equity stake in the mine. The mine’s other owners include BHP Billiton with 33.75%, Teck Cominco with 22.5% and Mitsubishi, which has a 10% interest.

Inmet plans to use the proceeds from the sale to pay down the remaining US$19.5 million owing under its US$40 million revolving credit facility. The company notes that it has sufficient tax losses to offset any taxes payable on the income, which will be reported in the third quarter.

Situated in the Peruvian Andes, Antamina churned out 72,500 tonnes copper-in-concentrate and 71,600 tonnes zinc-in-concentrate during the first quarter of 2003. Mill head grades were 1.32% copper and 1.54% zinc, with recoveries of 90.5% copper and 82.5% zinc.

In all of 2002, the mine produced 111,600 tonnes of copper and 77,900 tonnes of zinc in concentrate. Production during the first ten yeas is expected to average 300,000 tonnes of copper and 285,000 tonnes zinc, both in concentrate, per year. Overall, the operation will run for around 20 years.

At the end of 2002, Antimna’s proven and probable reserves stood at 530 million tonnes grading 1.22% copper and 1.01% zinc.

Inmet shares were a nickel higher at $7.05 in late afternoon trading following the news on July 16; Noranda’s issue was up 15 at $13.85.