SMM survey: what kind of metal do you like most in 2022?
Lundin Mining Corp. After agreeing to acquire Argentine copper and gold project Josemaria Resources Inc. for C $625 million (US $483 million) After that, the share price fell 16%, the biggest drop in March.
The acquisition will expand Lundin's copper mining operations in South America and is expected to produce an average of 130000 tonnes a year over Josemaria's 19-year mine life, Lundin said in a statement on Monday.
Production should start within five years. Miners and investors are optimistic about the future of copper because of its key role in global decarbonization efforts.
Morgan Stanley analyst Ioannis Masvoulas said in a report, "Lundin Mining's record in the development of large green space projects is limited, in addition, Argentina's licensing procedures and Lunding's planned review of project design / economics may pose further challenges."
Lundin said it made acquisitions in stock and cash in the 10 days to December 17, a 29 per cent premium to Josemaria's average transaction price in Toronto.
President and CEO Peter Rockandel said: "the acquisition of the Josemaria project complements Lundin's existing high-quality mine portfolio and highlights our focus on disciplined growth with a focus on copper.
Lundin led the decline in a group of copper miners on Monday after leftist candidate Gabriel Boric was elected president of Chile on Sunday, raising concerns about rising costs and slowing growth in the world's top producer. As of 1pm in Toronto, the stock fell 15% to C $9.10.
"while the licensing and stability agreement is still not guaranteed, management said Lundin chose to sign the deal now, noting that Josemaria's progress in achieving these milestones would lead to greater bidding tension for the asset," Masvoulas said.
