Metals Acquisition Corp. to Acquire the CSA Copper Mine from Glencore
- Definitive sale and purchase agreement entered into with Glencore Operations Australia Pty Limited, a wholly-owned subsidiary of Glencore plc (“Glencore”), for the acquisition of the CSA Copper Mine (“CSA” or “CSA Copper Mine”) in New South Wales, Australia
- CSA is an established, high-grade producing copper mine that is expected to produce more than 40kt of copper in 2022 with an estimated current mine life of over 15 years1
- Purchase price of:US$1,100 million, of which Glencore will subscribe for $50m of equity; plus
- a 1.5% copper net smelter royalty (“NSR”) to Glencore,
- Purchase price implies a 4.5x multiple of 2022E EBITDA2
- Near-term opportunities identified to add significant value via cost reductions and mine life extension
Metals Acquisition Corp. announced that it has entered into a definitive sale and purchase agreement (“Transaction Agreement”) with Glencore to acquire CSA for total consideration of US$1,100 million (consisting of US$1,050 million of cash and US$50 million of common equity) plus a 1.5% copper NSR (the “Transaction”). The Transaction will be effected by the acquisition by MAC’s 100%-owned subsidiary, Metals Acquisition Corp. (Australia) Pty Ltd, of the issued share capital of Cobar Management Pty Limited, a 100%-owned Glencore subsidiary which owns CSA.
Mick McMullen, MAC CEO, said: “The acquisition of CSA represents a strong strategic fit for MAC. Our management team’s operational expertise, understanding of regional operations and relationships with local stakeholders uniquely position us to identify and realize the full potential value of the asset. CSA also provides us with an ideal cornerstone asset with which to establish a high-quality, mid-tier base metals portfolio.
“We believe that copper has favorable fundamentals that will continue to support an elevated copper price. Copper is expected to play a key role in the global energy transition “megatrend”, with approximately 1 million tonnes per annum of new supply required from 2024 onwards in order to meet the surging demand forecast. With few new projects globally in the pipeline, increasing permitting issues and jurisdictional risk, and declining copper grades across the industry, we believe that there are significant challenges ahead to close the projected supply deficit.”
CSA is a producing, high-grade, long-life, underground copper mine located in the Tier 1 mining jurisdiction of western New South Wales, Australia. CSA has been in operation since 1967 and has a strong ESG track record.
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In 2021, CSA produced 41kt of payable copper and 459koz of payable silver, with normalised C1 cash cost of US$1.72 per pound of copper.3 During the due diligence process, MAC identified multiple opportunities to optimize the operation, which could improve payable copper production and reduce the C1 cash cost. CSA has a current estimated mine life of over 15 years4, and MAC has identified opportunities to further extend it, subject to exploration success. CSA will benefit from approximately US$130 million of recent capital investment expected prior to Transaction completion.
The US$1,100 million purchase price implies a 4.5x multiple of 2022E EBITDA.5
The Transaction has been unanimously approved by the Board of Directors of MAC, and is expected to be completed in 2022, subject to the approval of MAC’s shareholders and other customary closing conditions, including regulatory approvals.
Source: Metals Acquisition Corp.