Taseko’s Gibraltar mine, Canada’s second largest copper-molybdenum operation, is located in south-central British Columbia, near Williams Lake. (Image courtesy of Taseko Mines)
Taseko Mines (TSX: TKO; NYSE American: TGB; LSE: TKO) has agreed to acquire an additional 12.5% interest in the Gibraltar mine from Sojitz Corporation.
The trading house said the main reasons for offloading its interest in the British Columbia-based mine, acquired in 2010, were unstable operations, declining grades and increased risk of environmental liabilities.
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Gibraltar is the country’s second largest open pit copper mine. Last year it churned out 97 million pounds of copper, down 14% from the 112.3 million pounds it mined in 2021.
Gibraltar is operated through a joint venture which is owned 75% by Taseko and 25% by Cariboo Copper Corporation. Under the terms of the deal, Taseko will acquire Sojitz’s 50% interest in Cariboo, and will then hold an effective 87.5% interest in Gibraltar.
The acquisition price consists of a minimum of C$60 million ($44.3m) payable over a five-year period and potential contingent payments depending on Gibraltar mine revenues and copper prices over the next five years.
An initial C$10 million ($7.4m) will be paid to Sojitz upon closing and the remaining minimum amount will be paid in C$10 million annual instalments over the next five years.
“This is a logical and beneficial transaction for Taseko, providing immediate 17% growth in our attributable copper production and earnings from mine operations,” CEO Stuart McDonald said in a news release.
“Gibraltar is a high-quality asset with a long mine life in an excellent jurisdiction,” McDonald said. “The transaction is immediately accretive to Taseko and the deferred payment structure allows us to focus our financial capacity on the construction of the Florence Copper project which we expect to commence later this year.”
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