1st Sep 2015 09:48
LONDON (Alliance News) - Antofagasta PLC Tuesday said it has reached a deal which will result in the company getting one of its partially-owned subsidiaries to operate and develop its Encuentro oxides project in Chile.
The FTSE 100-listed miner said it has agreed to merge its wholly-owned subsidiary, CCM Encuentro, into Centinela which will result in the company contributing its Encuentro mining properties to Centinela's existing SX-EW plant in Chile.
Antofagasta has agreed the deal with Marubeni Corp. Centinela is owned 70% by Antofagasta and 30% by Marubeni.
The original concept of the Encuentro mining properties, part of the Encuentro oxides project, is for the project to supply feed for Centinela's existing SX-EW plant contributing some 50,000 tonnes of copper per year from 2019.
Under the terms of the agreement, Antofagasta can require Centinela to acquire and exploit certain parts of its mining concessions and mineral rights covered by the Encuentro mining properties once the pre-feasibility study has been completed.
Centinela will now be responsible for the construction and operation of the Encuentro oxides project, said the FTSE 100 company.
The amount to be paid for the merger will be calculated only once the feasibility study is completed and Centinela will then issue preference shares to Antofagasta which will carry rights only to receive cash dividends equal to the consideration amount.
Antofagasta shares were down 1.5% to 600.0 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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