Barrick Gold made a friendly takeover offer for Equinox Minerals that valued Equinox at C$7.3 billion. Equinox’s board of directors unanimously recommended that shareholders tender shares. As part of its agreement with Barrick, Equinox said it would withdraw its bid for Lundin Mining, announced during February.
Equinox has two major copper assets, the Lumwana open-pit mine in Zambia and its 70%-owned Jabal Sayid development project in Saudi Arabia. Equinox is in the process of acquiring the remaining 30% of Jabal Sayid. Combined with the Zaldivar mine and Cerro Casale project in Chile, the acquisition would position Barrick with significant growth potential in two major copper-producing regions.
“The acquisition of Equinox would add a high-quality, long-life asset to our portfolio and is consistent with our strategy of increasing gold and copper reserves through exploration and acquisitions,” said Aaron Regent, president and CEO, Barrick Gold. The transaction, Regent explained, does not dilute Barrick shareholders’ gold exposure per share and it enhances copper exposure per share during a period of strong copper prices.
The Lumwana mine began mining during 2008 and produced more than 320 million lb of copper in concentrates in 2010. The mine’s reserves total 4.5 billion lb of copper and the inferred mineral resources total 5.5 billion lb of copper. Jabal Sayid is projected to produce an average of more than 100 million lb/y of copper in concentrates and has reserves totaling 1.2 billion lb of copper. Mining will be from two underground lodes and one open-pit.