Metals Acquisition is believed to have cast its eye over the $1bn Portuguese copper and zinc mine Neves Corvo but walked away, and has announced plans to raise $140m to pay down debt and “pursue strategic inorganic growth opportunities”.
South32 also took a look at the Portuguese asset, sources say, but is no longer looking.
The Portuguese asset is on the market through BMO, with price assumptions of about $1bn.
It is nearing the final phase, with the contest now thought to be dominated by offshore groups.
Lundin Mining acquired Neves-Corvo, located in the western part of the Iberian Pyrite Belt in the south, as part of the company’s 2006 merger with EuroZinc Mining.
The zinc plant was recently expanded to a design nameplate capacity of 2.5 million tonnes per annum. It is expected to produce 30,000 to 35,000 tonnes of copper in 2024 and 120,000 to 130,000 tonnes of zinc.
Its processing facility at Neves-Corvo comprises two plants.
Its copper plant has the capacity to process about 2.8 million tonnes per annum, while the zinc plant can process zinc or copper with nameplate capacity of 2.5 million tonnes per annum.
Exploration around the mine has focused on the search for additional blind massive sulphide deposits.
Metals Acquisition, which sources say will soon change its name to MAC Copper, told the market on Wednesday that it will raise $140m by way of a placement at $18 per CHESS depositary interest, which is a 13 per cent discount to its last closing price on the ASX.
It comes after the stock recently recovered to close at $20.70 on Tuesday, after falling to about $15 last month from its 2024 high of about $22. The copper price rallied 22 per cent from August to September due to Chinese stimulus but has started to fall again.
The company said that proceeds from the offer would be used to optimise MAC’s balance sheet and promptly pay back its mezzanine debt.
Metals Acquisition said that until the proceeds could be used to retire the mezzanine debt, the additional capital would provide it with greater flexibility to pursue strategic inorganic growth opportunities.
“Upon settlement of the placement, MAC will be well capitalised with a … cash balance of $US177m in addition to its $US25m revolving credit facility,” Metals Acquisition said.
Metals Acquisition is listed on the Australian Securities Exchange, in addition to a listing in the US. It bought the CSA Copper Mine from Glencore for $1.6bn in 2023.
The company said it remained on track to deliver at the mid-point of the full-year 2024 copper production guidance of between 38,000 and 43,000 tonnes.
Investment bank Barrenjoey is working on the raising, in addition to Sternship Advisers as co-manager.
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