BHP and Lundin Mining to Jointly Acquire Argentina-focused Filo Corp in USD 2.9bn Deal, Forming Copper Mega-Joint Venture

By Velizar Velikov, Head of M&A Database at EMIS

Global mining giants BHP Group and Lundin Mining have reached an agreement to acquire Toronto-listed, Argentina-focused copper miner Filo Corp. in a deal valued at approximately CAD 4.1bn (USD 2.9bn). The acquisition will be executed through a court-approved plan of arrangement, with BHP and Lundin Mining forming a 50/50 joint venture to jointly develop the Filo del Sol (FDS) and Josemaria copper projects in Argentina.

Under the terms of the acquisition, BHP and Lundin Mining will pay CAD 33.00 (USD 23.85) per Filo share, representing a 32.2% premium to Filo’s 30-day volume-weighted average price as of July 11, 2024. Filo shareholders can choose to receive cash, shares of Lundin Mining, or a combination of both, subject to caps on the total cash and share consideration available.

BHP’s share of the acquisition will amount to CAD 1.9bn in cash, while Lundin Mining will contribute approximately CAD 2.2bn, consisting of up to CAD 859mn in cash and CAD 1.3bn in shares. Additionally, BHP and Lundin Mining will provide interim financing to Filo by subscribing to a private placement of 3.48 million Filo shares, injecting CAD 115mn into the company to fund ongoing exploration and working capital. 

Upon closing of the placement, BHP and Lundin Mining will own 7.1% and 1.7%, respectively, of Filo’s issued and outstanding shares. BHP acquired an initial 5% equity interest in Filo in March 2022, following the discovery of the high-grade Aurora Zone at FDS.

As part of the agreement, BHP will pay USD 690mn in cash to acquire a 50% interest in the Josemaria project from Lundin Mining. Located just 10 km from the FDS site, the joint venture aims to create synergies by leveraging shared infrastructure and economies of scale between the two adjacent projects. The Josemaria project, a fully permitted copper-gold project, complements the FDS site, one of the world’s largest undeveloped copper-gold-silver deposits.

The combined joint venture will benefit from BHP’s extensive global mining expertise and Lundin Mining’s strong operational track record in Argentina. The partnership is poised to unlock the long-term potential of the Vicuña copper district, which is emerging as a globally significant source of copper, a critical resource for the global energy transition.

The transaction is subject to customary regulatory and shareholder approvals and is expected to close in the first quarter of 2025. 

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

BHP, founded in 1885 in Australia, specializes in the production of iron ore, copper, coal, and nickel, and is involved in the exploration and production of oil and gas.

 

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