Reported in The Australian this morning that the IGO offer for the CSA mine was for about A$1.37 billion (US$1 billion) and that IGO has withdrawn that offer.
My understanding is that the CSA mine produces about 185,000 tonnes of copper concentrate at 27% contained copper metal for an equivalent 50,000 tonnes copper.
In contrast AIS produces about 25,000 tonnes of copper annually.
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Glencore’s CSA bids hit $US1bn: sources
Australian listed battery minerals producer IGO is understood to have offered $US1bn for Glencore’s CSA copper mine – far beyond initial estimates.
Sources originally believed that the price was above $1bn, but DataRoom understands that the price was in fact around the $US1bn ($1.37bn) mark.
As earlier reported, the focus now remains on the Nev Power and Bill Beaument-backed special purpose acquisition company Metals Acquisition Corp which this column understands offered a similar price to what IGO put forward.
Deal completion risk for SPACs is seen to be higher than an listed ASX-listed group.
For an acquisition, the management of the SPAC often needs to raise additional funds from what is in the vehicle through what is known as a private investment in public equity (PIPE), where a private investor buys a stake in the business at a discounted price ahead of a listing.
Investors also have to vote on the transaction.
It will be interesting to see if Metal Acquisition Corp is as eager to pay up for the business now, given the increasing market uncertainty linked to the Russia invasion of the Ukraine and rising energy prices, despite the value of copper remaining firm.
IGO entered exclusive talks to buy CSA but they collapsed without a transaction.
IGO’s shareholders had been unhappy about its acquisition plans and shares rallied more than 6 per cent on Tuesday when IGO announced that the transaction had fallen over.
One factor may have been that the equity raising to secure between $500m and $1bn to pay for the business would have been happening in a volatile market created in recent days by Russia’s attack on the Ukraine, but one analyst said it was mostly likely the terms of the transaction that saw IGO walk away.
Bank of America has been working on the sale of Glencore’s CSA mine in Cobar, NSW with UBS.
CSA each year produces more than 1.1 million tonnes of copper ore and in excess of 185,000 tonnes of copper concentrate, which is exported to smelters in India, China and Asia.
In the past, Aeris Resources has lined up to buy the mine, but the deal did not complete and earlier EMR Capital also weighed an acquisition.
The Australian
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