Lundin Mining entered into an agreement with an affiliate of Freeport-McMoRan to purchase an interest in Freeport’s stake in the Timok project located in Serbia. The high-grade copper-gold Cukaru Peki deposit is situated on one of the four mineral licenses comprising the Timok project. The project partners are currently Freeport, who is operator of the project, and an affiliate of Reservoir Minerals that holds a minority stake in the project and has certain transfer rights as a result of the proposed transaction.
Total consideration of up to $262.5 million is payable in stages upon the achievement of key development milestones defined under the purchase agreement.
“The acquisition of an interest in the Timok project is consistent with our growth criteria that we have rigorously followed over the last few years,” said Paul Conibear, president and CEO, Lundin Mining. “This high-quality copper-gold project fits ideally within our overall asset base of operations in the Americas and Europe. This transaction enables the existing Freeport/Reservoir partnership to leverage our proven underground base metals development, construction and operating skill sets to advance the Timok project into operation in a timely manner.”
Under the purchase agreement, Lundin will acquire 100% of Freeport’s interest in the upper zone of the Cukaru Peki deposit, as well as Freeport’s interest in all the mineral licenses comprising the Timok project, and 28% of Freeport’s interest in the lower zone of the Cukaru Peki deposit. Freeport will retain the remaining interest in the Lower Zone. In addition, Freeport has the option to have any new large mineral deposit containing at least 4 million metric tons (mt) of contained copper equivalent characterized in the same manner as the Lower Zone upon the payment to Lundin of two times drilling, study and other similar costs plus other direct costs such as land acquisition costs.
Lundin will be appointed as operator of the Timok project until the occurrence of certain events and Lundin will advance the development of both the Upper Zone and the Lower Zone.