By James Hyland
BHP and Lundin Mining are set to acquire Filo Corp. for C$4.5 billion, marking a significant milestone in the mining sector.
In a landmark deal, BHP and Lundin Mining have announced the acquisition of Filo Corp. for an impressive C$4.5 billion. This strategic move is set to consolidate the companies’ assets in the Vicuña district, promising enhanced operational efficiencies and significant synergies. The acquisition highlights the growing importance of the copper-gold-silver project, Filo del Sol, and the potential for substantial growth under the new joint venture.
BHP and Lundin Mining have agreed to purchase all outstanding shares of Filo Corp. that they do not already own. The deal, valued at C$4.5 billion, involves a mix of cash and Lundin Mining shares. This acquisition aims to unlock the full potential of Filo del Sol, a prominent copper-gold-silver project located in the San Juan Province of Argentina and Region III, Chile.
Jamie Beck, President, CEO, and Director of Filo, expressed his enthusiasm for the transaction, stating, “This transaction delivers compelling value to Filo’s shareholders, offering exposure to future development alongside Lundin Mining’s high-quality operating portfolio.” Beck emphasized the historical significance of the deal, reflecting on Filo’s journey since its inception.
Jamie Beck, President, CEO, and Director of Filo
The agreement outlines that Filo shareholders will receive C$33.00 per share, either in cash or Lundin Mining shares, representing a premium of over 25% to Filo’s recent share prices. This structure ensures that shareholders benefit from immediate value realization and future growth prospects through continued exposure to the project.
BHP’s CEO commented, “We see immense potential in the Vicuña district. This acquisition allows us to expand our footprint in one of the world’s most promising mining regions, leveraging our expertise and resources to drive growth.”
Lundin Mining’s CEO added, “Combining Filo del Sol with our existing assets creates a formidable presence in the Vicuña district. We are committed to advancing this project with a strong focus on operational excellence and sustainability.”
As part of the transaction, BHP and Lundin Mining will establish a Canadian joint venture (JV) to oversee the development of Filo del Sol and the Josemaria copper-gold project. Each company will hold a 50% interest in the JV, pooling their resources to maximize the development potential of these assets.
The joint venture is poised to capture significant synergies and operational efficiencies, enhancing the overall value of the projects. The combined financial strength and technical expertise of BHP and Lundin Mining will drive the rapid development of Filo del Sol, benefiting from favorable legislative conditions in Argentina for projects entering the development phase.
Future Prospects and Benefits
Filo shareholders who opt for Lundin Mining shares will gain from the company’s diversified asset portfolio, robust cash flow generation, and increased market profile. The enhanced liquidity of Lundin Mining shares also offers greater flexibility for shareholders.
The transaction has received unanimous approval from Filo’s board of directors and a special committee of independent directors. The deal is subject to customary closing conditions, including regulatory approvals and court sanctioning. A special meeting of Filo shareholders will be convened to vote on the transaction, with a 66â…”% approval threshold required.
The acquisition of Filo Corp. by BHP and Lundin Mining for C$4.5 billion marks a significant milestone in the mining sector. This strategic move promises substantial value for shareholders and the potential for accelerated development of the Filo del Sol project. With the combined expertise and resources of BHP and Lundin Mining, the future looks bright for this pivotal mining venture.
