Sandfire Resources (Neutral impact) announced a transformative acquisition which will turn it into a copper miner of global scale.
It is looking to purchase the MATSA mine, located in Andalusia, Spain (north-west of Seville) for US$1.865bn (A$2.572bn).
The MATSA mine consists of 3 deposits, which come together to form a first quartile polymetallic copper mine. The mine has a processing capacity of 4.7 Mtpa, with a reserve life of 6 years, and 12 years of resources.
Acquisition will be funded via a combination of debt, Sandfire's ample cash on balance sheet and an equity.
As part of the transaction, Sandfire will raise AU$1.248 bn in equity via 1-for-1 rights issue.
We are currently assessing the deal and will notify clients about our decision to participate in the coming weeks.
MATSA is in the 1st quartile of the global copper cost curve
Above: C1 Cost (cash cost) in USc per pound of copper of currently producing copper mines.
Source: Wood Mackenzie