BHP Western Mining Resources International Pty Ltd., a wholly owned subsidiary of BHP Group Ltd., will fund a C$100 million non-brokered private placement to advance the Filo Mining’s Filo del Sol Project in Chile, adjacent to the San Juan province, Argentina. BHP will issue an aggregate of 6,270,000 common shares of the company at a price of C$15.95 per common share. Upon closing, BHP will own approximately 5% of Filo Mining’s issued and outstanding common shares.
The asset is expected to produce an annual average of 67,000 tons of copper, 159,000 ounces (oz) of gold and 8.65 million oz of silver.
“I’m pleased to welcome BHP as our newest shareholder, and believe their investment is a significant endorsement in our project, team, and strategy,” Filo Mining President and CEO Jamie Beck said. “The private placement provided us with an opportunity to raise funds at a premium to market, limit dilution and minimize our financing costs. This secures the next leg of funding required for us to rapidly expand our exploration plans at Filo del Sol as we define this remarkable deposit.”
BHP will be granted certain participation and top-up rights, allowing BHP to maintain its ownership interest from time to time, provided that such participation rights will not apply to any portion of BHP’s ownership interest in excess of a 9.9% undiluted ownership level in the company. In addition, the company and BHP have agreed to form a joint advisory committee to share expertise, exploration concepts and discuss future project development.
Filo Mining intends to use the proceeds for exploration and development of the Filo del Sol project and for working capital and general corporate purposes. The private placement is expected to close on or before March 11.
Drilling will continue at Filo del Sol throughout 2022. Drilling will be a combination of step-out holes to further test the extent of the sulphide mineralized zones, and resource definition holes to provide a better understanding of the deposit geology and grade distribution. Data collected from the drilling will be used to advance the comprehensive geological model, which will guide further exploration and project development. The company was expected to have eight drills active on the Filo del Sol Project by the end of February.
According to Lundin Mining, majority owner of Filo Mining, the project is expected to be an operation equal to or larger in size than its Candelaria mine in Chile. President Lukas Lundin has said the construction of Filo del Sol will cost between $4 billion to $5 billion.
According to the latest figures published by the company, the Filo del Sol project would have an estimated value, after taxes, of $1.28 billion, with an internal rate of return of 23%.
