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Lundin Mining acquires majority interest in Caserones copper mine in Chile

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(Kitco News) - Lundin Mining (TSX: LUN) yesterday announced that it has entered into a binding purchase agreement with JX Nippon Mining & Metals to acquire 51% of the issued and outstanding equity of SCM Minera Lumina Copper Chile, a wholly owned subsidiary of JX which operates the Caserones copper-molybdenum mine located in Chile.

In a statement, the company said that JX will receive upfront cash consideration from Lundin Mining of $800 million, and in addition, $150 million in deferred cash consideration will be payable by Lundin Mining in installments over a six-year period following the closing date.

Lundin Mining added it will also have the right to acquire up to an additional 19% interest in Caserones for $350 million over a five-year period commencing on the first anniversary of the date of closing.

Caserones is a significant porphyry copper-molybdenum deposit in the Atacama Region (Region III) of the northern Chilean Andean Cordillera, situated between the Maricunga and El Indio belts and is part of the emerging Vicuña copper district.

The operation produces copper and molybdenum concentrates from a traditional open pit mine and conventional sulphide flotation plant, as well as copper cathode from a dump leach, solvent extraction and electrowinning plant.

First copper cathode was produced in 2013, followed by copper and molybdenum concentrates in 2014. In 2022, the concentrator plant produced 109.1 kt of copper in concentrate. In addition, 15.1 kt of copper cathodes and 3.1 kt of molybdenum in concentrate were produced.

The company said that a "historical estimate" (as defined in National Instrument 43-101) for copper proven and probable mineral reserves is 892.1 Mt at an average grade of 0.33% copper containing approximately 2.9 Mt of copper and historical estimate for copper measured and indicated mineral resources is 1.595 Bt at an average grade of 0.29% copper containing 4.583 Mt of copper.

Lundin noted that a qualified person has not done sufficient work to classify these historical estimates as current mineral resources or mineral reserves and the company is not treating the historical estimate as current mineral resources or mineral reserves.

Commenting on the transaction, CEO Peter Rockandel said, "Upon closing of the acquisition of Caserones, we add another long-life copper mine of material size and with significant growth potential to our portfolio, in a region in which we have considerable knowledge and experience. The Caserones team has achieved meaningful operational improvements in recent years, and we will work to unlock additional upside through our strong technical resources and existing presence in the region.

"The initial controlling interest increases our exposure to what we believe is a growing top-tier copper mining district. We retain the option to further increase our ownership over the next few years at an attractive price. The acquisition further solidifies Lundin Mining's position as a growing global producer of copper as the world shifts to a lower carbon future."

Lundin Mining is a diversified Canadian base metals mining company with operations and projects in Argentina, Brazil, Chile, Portugal, Sweden and the United States of America, primarily producing copper, zinc, gold and nickel.

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