Taseko will acquire Dowa and Furukawa’s shares in Cariboo Copper, which allows Taseko to gain an effective 100% stake in the Gibraltar Mine, for a minimum of C$117m ($86m), payable over ten years, and additional contingent payments
Taseko to acquire Gibraltar copper mine. (Credit: Miroslav Gecovic from Pixabay)
Canadian copper mining company Taseko Mines has agreed to acquire the remaining 12.5% interest in the Gibraltar Mine from Dowa Metals & Mining and Furukawa.
Under the terms of the agreement, Taseko will acquire Dowa and Furukawa’s shares in Cariboo Copper, which allows Taseko to gain an effective 100% stake in the Gibraltar Mine.
The transaction price comprises a minimum of C$117m ($86m), payable over ten years, and additional contingent payments based on copper prices and Gibraltar mine’s cash flow.
An initial C$5m will be paid to Dowa and Furukawa, 2.5m each, shortly after closing and the remaining amounts will be settled with annual payments commencing in March 2026.
Taseko president and CEO Stuart McDonald said: “We are happy to once again own 100% of the Gibraltar mine, our foundational asset, which will continue to generate strong returns for the Company for many years to come.
“This acquisition provides 14% growth in our attributable copper production and is immediately cashflow accretive as we advance construction at our Florence Copper Project.
“We also receive additional offtake rights as the Cariboo offtake contract comes back to Taseko, providing potential cost savings and longer-term strategic benefits as we continue to develop our North American copper production profile.”
The annual payments are linked to the average London Metal Exchange copper price from the previous calendar year, based on a percentage of cashflow from the Gibraltar Mine.
If the copper prices are below $4 per pound, the annual payment will be C$5m, and a maximum annual payment of C$15.25m at copper prices of C$5 per pound or higher.
Also, the annual payments cannot exceed 6.25% of the mine’s annual cashflow between 2025 and 2028, and 10% of its cashflow for the 2029-2033 calendar years.
The outstanding balance on the minimum consideration will be repayable in March 2034, and the total payment is capped at C$142m, limiting the contingent consideration to C$25m.
The company has the option to make total payments of $117m at any time before 2029.
Taseko’s minimum payment obligations are structured as loans from Dowa and Furukawa to Cariboo, which are guaranteed by Taseko, and partly by Cariboo’s 25% interest in the Gibraltar mine.
Furthermore, Dowa and Furukawa will receive 30% of Gibraltar’s copper concentrate offtake for the life of the mine, under the offtake arrangements signed in 2010.