Cominco has a 47.25% interest in the mine; Teck, 29.25%.
Aur has agreed to buy Teck and Cominco’s shares and subordinated debt in the mine for US$155 million. When the deal closes, $120 million will be paid; the balance, including interest, must be paid in cash or Aur shares by December 15, 2002.
In addition, Aur has agreed to buy US$67 million of senior debt owed to one of Teck’s wholly owned subsidiaries. Aur will also pay state-owned Empresa Nacional de Minera (Enami) US$2.1 million per year over the next four years and make subsequent payments of US$40 million to Teck and Cominco if copper prices average over US$1.10 per lb.
The sale is expected to close by mid-June and is subject to Aur’s procuring financing and regulatory approvals.
The Chilean company Inversiones Mineras (also known as Pudahuel) has waived its right of first refusal and withdrawn its acceptance of Teck and Cominco’s former offer. Pudahuel had offered to pay up to US$262 million under the same terms as those negotiated by Aur (T.N.M., March 13-19/00). Pudahuel owns a 13.5% stake in Quebrada Blanca, while Enami has a 10% carried interest.
Cominco says its US$176-million share of the sale will be used primarily to reduce debt. The sale will cause Teck’s cash reserves to double to US$280 million. The major continues to eliminate its non-core minority interests in order to concentrate on larger projects, such as the advanced-stage Antamina copper-zinc project in Peru.
In 2000, Quebrada Blanca is expected to produce 75,000 tonnes of cathode copper from solvent extraction-electrowinning. Current cash costs are about US$1,125 per tonne, and reserves are pegged at 150 million tonnes grading 0.91% copper.
Be the first to comment on "Aur buys stake in Quebrada Blanca mine"