Diversified miner South32 has completed the acquisition of a 45% interest in the Sierra Gorda copper mine, in Chile, from Sumitomo Metal Mining and Sumitomo Corporation.
South32 in October entered into two binding conditional agreements with Sumitomo Metal Mining and Sumitomo Corporation for the acquisition of a 45% indirect interest in Sierra Gordafor an upfront cash consideration of $1.4-billion.
South32 has also agreed to provide Sumitomo with a contingent price-linked consideration of up to $500-million, payable at threshold copper production rates and prices in the years 2022 to 2025.
“By adding copper to our portfolio [. . .] we are making significant progress reshaping our portfolio for a low-carbon future,” said South32 CEO Graham Kerr.
The Sierra Gorda openpit mine is expected to contribute 31 000 t of copper equivalent, 27 000 t of copper production, 10 000 oz of gold and 225 000 oz of silver production to the South32 portfolio during 2022.
Sierra Gorda has a copper/molybdenum/gold sulphide mineral reserve of more than one-billion tonnes, and a mine life of more than 20 years.
A feasibility study is also underway for a brownfield oxide project, which is assessing the opportunity to process material stockpiled at the mine, and potential exists for further exploration upside at the Pampa Lina deposit, and across the regional land package.
Completion of the transaction is expected early in 2022, subject to the satisfaction of the remaining conditions.