First Quantum Minerals Ltd. agreed to acquire Lumina Copper Corp. for about C$470 million ($433 million) to add the Taca Taca deposit to its portfolio of Latin American copper development projects.
Lumina shareholders will receive cash, stock or a combination of both, the Vancouver-based companies said today in a statement. Holders that choose the option for cash will get C$10 a share, which is 28 percent more than Lumina’s closing share price yesterday, the companies said.
Taca Taca in Argentina has an indicated mineral resource of about 21.2 billion pounds of copper. First Quantum, which has mines in Africa, Australia and Europe, completed its biggest deal last year when it bought Inmet Mining Corp. to add a project in Panama.
“The acquisition of Lumina is another step in First Quantum’s long-stated objective of geographical diversification,” First Quantum Chairman and Chief Executive Officer Philip Pascall said in the statement.
Lumina rose 23 percent to C$9.62 at 4 p.m. in Toronto. First Quantum fell 1.6 percent to C$21.30.
Lumina began the process of looking for a buyer two years ago as Argentina fell out of favor with some foreign investors after the South American country moved to expropriate oil producer YPF SA.
“Argentina is moving in the right direction and is open for business,” Lumina CEO David Strang said today by telephone.
“We ran a thorough strategic process and we found the best buyer for this project,” he said, declining to identify other companies that may have been in competition with First Quantum for Lumina.
First Quantum was advised on the transaction by RBC Capital Markets and law firm Fasken Martineau DuMoulin LLP, according to the statement.
Lumina ran its sales process itself, with Raymond James Ltd. advising an independent committee of the mining company’s board of directors, Strang said. Borden Ladner Gervais LLP is acting as legal counsel to Lumina, according to the statement.
First Quantum said it currently owns 2.5 million of Lumina’s outstanding shares, which is 5.7 percent of the total according to data compiled by Bloomberg. Lumina founder and mining investor Ross Beaty is the company’s biggest shareholder with a 22 percent stake, according to data compiled by Bloomberg.