HOW TO BUY A COPPER MINE

OFFER FOR COPPER PRODUCER

SMALL Australian copper producer Aeris Resources on Wednesday said it had offered to buy global trader and miner Glencore’s CSA copper mine in the state of New South Wales for $575 million (R8.2 billion). Aeris said in a statement that negotiations to buy the mine in Cobar were at a late stage, with the offer comprising $525 million in cash, $50 million in Aeris shares and a royalty payable to Glencore. A spokesperson for Glencore declined to comment on Wednesday. The Queensland-headquartered Aeris, with a market value of A$78 million (R782m), said the acquisition could be funded through a combination of debt, an equity capital raising and a so-called streaming agreement through which it would sell silver produced at the mine alongside copper to Glencore. “(Aeris) have a mine down the road, so as to that, it makes sense and the asset had been flagged for sale for a while,” said an analyst in Sydney, declining to be identified as the deal has not been finalised. “Cobar produces around 50 000 tons of copper a year, so that would make for a mid-tier copper player in Australia.” Glencore had put the mine up for sale in 2015, but withdrew it from the market in 2016 after failing to agree a deal with potential buyers. The debt component of the acquisition would stand at between $250m and $300m, with the capital raising at between $185m and $240m and Glencore’s streaming deal at $35m to $40m, Aeris said. Aeris said it was in late stage discussions on funding. | Reuters