BHP buys into Ecuador copper project with SolGold stake
PERTH (miningweekly.com) – Diversified miner BHP has struck a deal with TSX-listed Guyana Goldfields (GGI) to acquire its 6.1% interest in SolGold, which is the majority owner and operator of the Cascabel porphyry copper/gold project, in Ecuador.
Under the terms of the agreement, BHP will acquire GGI's entire stake of 103.12-million shares in London- and Toronto-listed SolGold for an aggregate purchase price of £27.4-million or £0.26592 per share, representing a premium of about 20% to the 20-day volume-weighted average price of SolGold shares on the London Stock Exchange on September 4.
Closing of the transaction is expected to occur on or about September 6, and based on current exchange rates, the transaction consideration is expected to equate to about $35-million.
BHP CEO Andrew Mackenzie said the investment in SolGold would give the company exposure to a high-quality copper exploration project in Ecuador, which is a highly prospective location for BHP.
“Consistent with our positive long-term outlook, copper is a key exploration focus for BHP as we seek to replenish our resource base and grow this important business.”
GGI president and CEO Scott Caldwell said that the sale of the company’s shares in SolGold would significantly strengthen its balance sheet and would leave GGI well positioned to deliver on its targeted production growth over the near term.
He pointed out to shareholders, on Wednesday, that its initial purchase price for its 6.1% stake in SolGold was $10-million.
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